Taken as a whole, asset managers look after trillions of dollars’ worth of capital. No surprise then that three of the biggest ones – BlackRock, Vanguard and State Street – are often mentioned together as powers behind the throne who wield enough capital to sway industry decisions.
But there is a new power rising in the world of finance, and that is crypto. Anyone doubting that should take a look at the recent fanfare that surrounded Crypto Week on Capitol Hill. With that in mind, DisruptionBanking takes a look at how well (or not) these three big hitters in asset management have been adapting to the sea change.
Power is a Dirty Business
BlackRock, Vanguard and State Street are not always referenced as clandestine power brokers in the most savory of contexts. For instance it recently came to light that the trio is heavily invested in big oil polluters, holding nearly a fifth of total shares in the so-called Dirty Dozen between them.
ESG campaigners might therefore take wry pleasure in noting that two of the asset managers appear to be struggling to keep up with crypto. Likewise, they might also be disturbed to see that the other is, at the time of writing, heavily invested and fully intent on riding the digital currency wave sweeping the planet.
Just like oil, power struggles are usually a dirty business – so how are BlackRock, Vanguard and State Street faring in the emerging struggle for dominance in the crypto space?
BlackRock: Crypto Aggressive
Of the three, the asset manager most aggressively investing in cryptocurrency is BlackRock. That is not good news for anyone who has a problem with big corporations getting too big for their boots: because the firm is also the world’s top-ranked asset manager, with a record estimated $12.5 trillion in assets under management (AUM) in 2025.
But like it or not, BlackRock appears wise to the shifting trends putting winds into cryptocurrency’s sails. It holds BTC577,919, which in the current price of Bitcoin at the time of writing works out to about $68.34 billion. That represents roughly half a percent of BlackRock’s total AUM – so call it a small but significant portion of the asset giant’s total holdings.
Then there is its Bitcoin-denominated exchange traded fund, iShares Bitcoin Trust ETF, which in Traders Union’s words offers “investors a straightforward way to invest” in the flagship digital currency. Launched in 2024, it now holds an estimated $57 billion in assets.
Adjacent to that, BlackRock is also partnered with Curve Finance and Elixir in the DeFi space to the tune of $533 million, and offers crypto trading through Coinbase Prime, which it has even integrated into its in-house Aladdin system.
Vanguard: Crypto U-Turn
When it comes to cryptocurrencies, Vanguard – which holds around $8 trillion AUM – hasn’t quite been living up to its name. Back in 2021, it said it believed that “their long-term investment case is weak.” Fast forward to July this year, when pundits gleefully noted the irony of Vanguard’s becoming “the largest shareholder of the most established Bitcoin equity play.”
The equity in question is MicroStrategy, of which the aforementioned BlackRock owns a 5.8 percent holding, which works out at about 14 million shares. That’s substantial but on the small side when compared to Vanguard’s 20 million, valued at a cool $9 billion.
Vanguard was a crypto naysayer, so what changed? Not much, according to some, because Vanguard’s involvement in Bitcoin is passive and does not necessarily reflect a fundamental change of heart on cryptocurrency. That is to say, the asset manager has only gotten caught up in the crypto craze by way of osmosis, investing in funds that happen to include cryptocurrencies on their books.
As Bloomberg Senior ETF analyst Eric Balchunas puts it: “When you have an index fund, you have to own all the stocks, for better or worse, and that includes stocks that you may not like or approve of personally.”
State Street: Crypto Cautious
State Street may not be literally shuffling papers across desks, but it is generally regarded as something of a laggard when it comes to adopting electronic solutions to problems. As such, its slow adoption of crypto should come as little surprise – but there are signs that it is trying to move forward.
Earlier this year it was reported that the $4.7 trillion AUM-valued asset manager plans to move into crypto in 2026. If that seems late, in fairness it should be borne in mind that the SEC’s SAB 121 accounting rule hampered US bank involvement in crypto for three years. Hence, per Ledger Insights, State Street “had an on-and-off relationship with digital assets.”
SAB 121 rescinded, State Street appears to be shuffling virtual papers in crypto’s general direction. Last year it entered the crypto custody space – and though it must be stressed that assets under custody are not the same as AUM because a custodian makes no investment decisions, it’s a tentative first foot forward.
Responding to increased investor appetite for crypto, State Street says it will roll out its crypto custody service in 2026, targeting institutional (think: big money) investors, over-the-counter traders, market makers, and large funds.
The Bigger Picture
All in all, this snapshot of three big AUM players and their changing relationship with cryptocurrencies serves as a useful bellwether to show where finance is moving. The industry’s admittedly reluctant shift towards crypto reflects a gradual but increasing diversion of money invested on behalf of things like pension portfolios away from the more traditional stocks and shares in conventional companies.
To call it a revolution is perhaps something of an exaggeration. Revolutions tend to be associated with sudden seismic changes – a sweeping away of the old order to be replaced, seemingly overnight, by the new (for better or worse). This isn’t quite what’s happening here – if anything, it’s more of an evolution, from older stocks and financial vehicles to something new and decidedly digital.
Whether or not that new vehicle is content to share the same highway as its older models, or ends up shunting them off the road, remains to be seen.
#Insights #Cryptocurrency #AssetManagement #FinancialServices
Author: Damien Black
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
See Also:
Bitcoin Boom Slows at BlackRock in Q1 2025 | Disruption Banking
BNY and BlackRock Bet Big on Blockchain’s Future | Disruption Banking
