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World’s Largest Asset Manager, BlackRock, to Invest in Bitcoin Futures

  • The largest assets manager in the world, BlackRock, has made moves to join the Bitcoin business
  • BlackRock has filed with the U.S. Securities and Exchange Commission (SEC) for two of its funds to invest in bitcoin futures
  • Both funds will now be able to use cash-settled bitcoin futures, among other assets

The world’s largest asset manager BlackRock Inc BLK.N, with $7.81 trillion under management, is adding bitcoin futures as an eligible investment. The firm has filed to the U.S. SEC for two of its funds to invest in Bitcoin.

BlackRock Funds Can Now Trade Bitcoin

According to filings released on Wednesday the two funds; BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund will now be able to use bitcoin derivatives and other assets.

The move marks the first cryptocurrency exposure for clients of the world’s largest asset manager. However, in December, the CEO of BlackRock, Larry Fink hinted at the possibility.

In an interview, Larry Fink explained that the world’s most popular cryptocurrency, Bitcoin, was enjoying massive daily adoptions and could unfold into a global market. Although he notes that the industry is still in its infancy, he believes it has “caught the attention and the imagination of many people.”

Details of the Bitcoin Futures Approval

The two funds to receive the approval will only be able to trade cash-settled bitcoin futures. This means that investors of Bitcoin futures will receive a simple cash credit when the contract expires. Such settlements do not require physical delivery of the underlying asset.

An important point is that the two funds will be able to trade only in bitcoin futures that trade on exchanges that have been registered with the Commodity Futures Trading Commission. Currently, the only exchange registered exchange is the Chicago Mercantile Exchange (CME).

On the Flipside

  • Although cryptos are making giant strides daily, not everyone is a fan of the growing industry.
  • Janet Yellen, a nominee for the position of secretary of the US Treasury Secretary, and former head of the Federal Reserve is one of such people.
  • Speaking earlier this week she stated that bitcoin and other digital assets “mainly” used for illegal activity and their use should be curtailed.

BlackRock’s Journey into Crypto

The chief investment officer of BlackRock, Rick Rieder, in an interview with Bloomberg explained that due to high demand for bitcoin “it’s going to be part of the asset suite for investors for a long time.” He further says that Bitcoin is here to stay.

The firm’s earliest quest into the crypto market came back in 2018. Then, the asset manager put together a team of experts to explore potential investments in digital currencies and blockchain. About three years later, the leading asset managers made their debut in the crypto market.

There has been a rise in the interest in Bitcoin futures tied to the crypto. According to FactSet Data tracking In the last 30 days, there has been a nearly 19 percent increase and a 192 percent increase over the past three months.

Much has changed about Bitcoin in the last 2 years, not only are institutional investors interested in the crypto, but they are also throwing their weight behind Bitcoin.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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