Digital Assets: BlackRock Dips Its Toes In Bitcoin Waters

January 22, 2021 | Digital Assets, Latest News, News
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SEC filings show two BlackRock funds are authorized to invest in bitcoin futures.

Filings out Wednesday show that the BlackRock Strategic Income Opportunities Portfolio and BlackRock Global Allocation Fund may invest in cash-settled bitcoin futures, among other assets. BlackRock (NYSE: BLK), the world’s largest asset manager with $7.8 trillion in assets, said in the filings that certain of its funds “may engage in futures contracts based on bitcoin.” (Bitcoin.com)

Only cash-settled futures

However, the filings stipulated that the two funds can invest only in cash-settled bitcoin futures. Further, these should be traded on commodity exchanges registered with the Commodity Futures Trading Commission. At the current time, only the CME exchange fits this bill.

Institutions and asset managers have increasingly been investing in bitcoin.

British asset manager Ruffer held nearly a $1 billion exposure to bitcoin as of December 31, 2020. It said in a quarterly review that “we think we are relatively early to this, at the foothills of a long trend of institutional adoption and financialization of bitcoin.”

However, Ruffer made it abundantly clear that it held the cryptocurrency strictly as a diversifier.

Other asset managers may toe BlackRock’s line

Todd Rosenbluth, director of mutual fund research at CFRA, told Reuters that other U.S.-based asset managers may follow BlackRock’s example. They may add exposure to bitcoin in some form as the cryptocurrency market becomes more liquid and developed, he said.

Moreover, BlackRock Chief Executive Officer Larry Fink commented recently that bitcoin was seeing huge moves every day. He said it could become a global market.

Notably, three years ago Fink said that bitcoin was an “index of money laundering.”

Related Story:  “An Anti-Asset Like Bitcoin Can Be a True Diversifier” (Ruffer)                                                

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