It is not uncommon for Wall Street firms to dabble in cryptocurrencies since digital assets have developed as an alternative investment class that helps diversify portfolios. You may already know that several financial behemoths have taken a liking to cryptocurrencies over the years. JP Morgan, Goldman Sachs, and Morgan Stanley, to mention a few, have made large investments in the industry, whether directly through the provision of crypto services or indirectly through affiliated entities. Even meme coins, which are regarded as among the riskiest bets in an already volatile market, have attracted some prominent names. The most well-known is Tesla and its eccentric billionaire CEO Elon Musk, who appears to be a huge fan of Dogecoin.
When it comes to Wall Street's involvement in cryptocurrencies, particularly meme coins, BlackRock and PEPE are unlikely to be mentioned in the same sentence. But recent headlines have drastically changed that notion.
According to multiple reports, blockchain addresses with the name 'BlackRock' have been purchasing and selling massive amounts of PEPE, the meme coin that has recently caught the world by storm. But is that really the case? And if so, does that make BlackRock a PEPE whale? Let’s find out.
Is BlackRock on the hunt for PEPE?
Yes, the cryptocurrency industry was in recovery mode in the first quarter of 2023, but the recently launched meme coin, PEPE, has all of the bragging rights. Less than three weeks post its launch in mid-April 2023, the coin’s market cap soared to $420 million, pushing the project into the top 100 coins by market capitalization. Come May 5, 2023, the coin hit a market value of $1.8 billion, jumping nearly 7,000 percent post its launch. Speaking to Reuters, CoinDesk analyst Todd Groth said that certain meme coins can pop up on occasion and especially during choppy or sideways markets.
When the price of a cryptocurrency shoots up in such a dramatic fashion, it is often preceded by buying euphoria amongst investors and traders. Blockchain analytical firm Arkham Intelligence reported that more than 50 addresses held PEPE tokens worth over $1 million each. Some addresses even profited wildly following the meme coin’s surge.
According to reports, one wallet had profited more than $1.4 million after buying 321 ETH worth of PEPE an hour before Binance listed the meme coin. Separately, an Ethereum address was alleged to have spent $260 to purchase 5.9 trillion PEPE tokens, making a $4 million profit by only selling 56 percent of their holdings.
Amidst the buying frenzy, some on-chain platforms were quick to notice that addresses carrying the tag ‘BlackRock’ were placing large orders on PEPE tokens. More specifically, on-chain trackers showed that a wallet bearing the name ‘BlackRock’ withdrew 1.27 trillion in PEPE tokens (worth around $1.98 million), from crypto exchange Binance to four addresses on May 18. It was revealed that the four addresses identified used the same Binance deposit address as ‘blackrockfund3.eth’. Blockchain data tracker Lookonchain discussed that the newly created addresses could belong to the American fund manager, BlackRock.
Lookonchain data even showed that the alleged BlackRock addresses bought 1 trillion worth of PEPE tokens on April 21, worth around $244K at the time. The addresses then netted a profit of $2.39 million by selling their PEPE holdings on May 5.
Given the enormous bags of PEPE that BlackRock allegedly purchased, the fund manager was a PEPE whale for a short time. Is this the case, however?
More to the story?
The anonymity behind blockchain addresses and who owns them works often like a double-edged sword. In that regard, it’s nearly impossible to know whether or not BlackRock actually owns the addresses mentioned above, unless the fund manager makes an official statement. At the moment, we can only speculate.
Meanwhile, a more logical thought process would reject any idea of BlackRock owning PEPE coins. The world’s largest fund manager, BlackRock, manages over $10 trillion in assets. It adheres to a systematic, internally created, model-driven investment approach. In other words, it seems unlikely that the company would abandon this approach for making quick gains through meme coins. One could make a case that a Q1 2023 net profit decline of 19 percent to $1.16 billion may have prompted BlackRock to suddenly make up for the shortfall by investing in high-risk assets. But then again, a $2.39 million profit on PEPE would barely make a dent in its books.
Furthermore, BlackRock recently lost $24 million following the collapse of the crypto exchange, FTX. BlackRock CEO Larry Fink later stated that the firm ‘may have been misled’ in the small investment it made in FTX. Considering this recent loss, it appears unlikely that the fund manager would set aside some cash to invest in PEPE.
Looking at BlackRock's strategy, it is clear that the company focuses on indirect crypto investments. Although BlackRock's clients and consumers can trade Bitcoin through a relationship with Coinbase, the company's major crypto cash cow is its crypto-related ETFs.
Conclusion
So, in conclusion, addresses with the 'BlackRock' designation unlikely belong to the fund manager. The news may be somewhat somber for PEPE supporters, but they must remember that there are many other significant buyers in the market, and there may be even brighter days ahead for PEPE, regardless of whether or not BlackRock is a PEPE whale
