BlackRock’s Crypto Assets Drop 39% Despite Strong Investor Inflows

BlackRock’s digital asset business shrank sharply over the past year even as money kept flowing into its crypto products, showing just how tightly the firm’s crypto ETF business is tied to price swings in the broader market.

Inflows Couldn’t Offset Falling Prices

According to BlackRock’s latest earnings release, digital asset products fell to $48.8 billion at the end of the second quarter, down from $79.6 billion a year earlier, a drop of almost 39%. This happened despite $15.1 billion in net inflows over the past 12 months, which were outweighed by $45.8 billion in market value losses.

The weakness carried into the second quarter itself, when the products saw $3.1 billion in net outflows. Bitcoin fell more than 14% during the quarter while ether dropped 25%, weighing heavily on fund values.

Broader Business Still Setting Records

The crypto segment’s struggles stood in contrast to BlackRock’s overall performance, which hit record assets under management of $15.3 trillion after pulling in $192 billion in net inflows for the quarter. The firm also beat Wall Street expectations, posting adjusted earnings per share of $13.91 on $7.08 billion in revenue. Shares traded 4.15% higher in pre-market trading Wednesday.

Long-Term Crypto Ambitions Remain

BlackRock said it’s targeting $500 million in annual revenue from its crypto business by 2030, more than ten times its current $40 million in base fees and securities lending from the segment. The firm has expanded its crypto ETF lineup since launching its bitcoin and ether ETFs in 2024, more recently adding an income focused bitcoin ETF using covered call strategies. BlackRock also manages $60 billion of Circle’s reserves and pointed to the world’s roughly 5 billion crypto wallets as a future distribution channel for its traditional investment products.