BlackRock, an investment giant asset manager with $7.81 trillion under management, seems to have given at least two of its funds the power to invest in bitcoin futures.
The world’s largest asset manager filed documents with the Securities and Exchange Commission on Wednesday. According to documents submitted to the SEC, the company intends to offer its clients exposure to bitcoin futures BTC.1, -0.20% via funds, BlackRock Strategic Income Opportunities BSIIX, +0.10%, and BlackRock Global Allocation Fund Inc. MALOX, +0.86%, part of the BlackRock Funds V series.
The two filings for the BlackRock Global Allocation Fund and the BlackRock Strategic Income Opportunities Portfolio stated that some funds might engage in BTC-based futures contracts.
BlackRock Interest in Bitcoin Futures
The regulatory filings did not specify which commodity exchange BlackRock will choose to execute these crypto futures buys. However, the funds may only invest in cash-settled bitcoin futures. CME is the only exchange registered with the Commodity Futures Trading Commission (CFTC) that offers similar futures products at this time.
BlackRock also acknowledged the liquidity risks that accompany investments in bitcoin futures, which stem from the new market. The lots are not as heavily traded as similar products.
The interest in bitcoin futures for the money manager comes as bitcoin prices have been seeing spectacular moves higher, with a pullback in recent days highlighting the inherent volatility in the virtual asset that came into existence about a decade ago.
Recently Bitcoin spiked to an all-time high of more than $40,000 before plunging back. Some attributed the rally to heightened interest from institutional investors, including Massachusetts Mutual Life Insurance.
A Global Market
A few years ago, BlackRock CEO Larry Fink said bitcoin was an “index of money laundering.” Recently he said that the cryptocurrency could “possibly” evolve into a global market one day.
The asset manager also recently posted a job opening for a blockchain and crypto executive, seeking a blockchain vice president for its New York office.
The posting said that the candidates for the position should show the capability to create valuation models for cryptocurrencies. Furthermore, it will evaluate governance models and other aspects of the underlying technology.
Rick Rieder, a chief investment officer of global fixed income and head of the worldwide allocation team, recently described himself as maintaining a relatively sober view of the popular virtual asset. He noted that some bulls say cryptos are challenging gold GC00, 0.16% as an alternative investment. Last November, Rieder said he believes cryptos are “here to stay.”
