The world’s largest asset manager with $7.8 trillion in assets under management, BlackRock, has seemingly granted at least two of its funds the ability to invest in bitcoin futures.
The firm filed updated prospectuses for two of its funds including cash-settled bitcoin futures among assets they’re now permitted to buy. The filings, for the BlackRock Strategic Income Opportunities and the BlackRock Global Allocation Fund, appeared on the U.S. Securities and Exchange Commission’s website on Wednesday.
The move shows BlackRock is at least willing to test the waters on BTC. The filing details that the funds can invest in cash-settled bitcoin futures, which do not require the funds to own the actual cryptocurrency.
The documents also do not detail which exchange BlackRock plans on using. Since the funds can only invest in cash-settled futures, most assume it will be the CME. IT’s the only exchange registered with the Commodity Futures Trading Commission (CFTC) offering similar futures products.
The asset manager’s co-founder, Chairman and CEO Larry Fink has in December of last year revealed during an interview he believes bitcoin has “caught the attention and the imagination of many people.”
- Bitcoin has caught the attention and the imagination of many people. Still untested, pretty small market relative to other markets.
BlackRock’s filings warn that investment in cash-settled bitcoin futures could carry illiquidity risks due to the “relatively new” market. Valuation risks and regulatory changes also weigh on the price and could impact the funds, the filings read.
Back in November, during an interview on CNBC’s Squawk Box, Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income, was asked about cryptocurrency regulations. He replied he thinks “cryptocurrency is here to stay,” and is “durable.”
Per Rieder’s words, BTC is “much more functional” than gold and could even replace it “to a large extent.” BlackRock has late last year posted a job offer looking for a crypto executive for its New York office. Candidates for the position should be able to create crypto valuation models, as well as models to evaluate governance and other aspects of cryptoassets.
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