REUTERS / Eric Thayer
BlackRock has authorized two of its funds to invest in bitcoin futures, according to documents released Wednesday by the Securities and Exchange Commission.
The move exposes the clients of the world’s largest asset manager to cryptocurrencies.
The $ 8.7 trillion asset manager said he could use bitcoin derivatives under the BlackRock Strategic Income Opportunities and the BlackRock Global Allocation Fund, among others.
The funds may only trade cash-traded bitcoin futures contracts, which means that the holder will receive a simple cash credit once the contract expires. Such settlements do not require physical delivery of the underlying asset.
More specifically, the two BlackRock funds will only trade in bitcoin futures that trade on exchanges registered with the Commodity Futures Trading Commission. At present, the only exchange registered for this is the CME.
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Bitcoin hit a high of $ 41,000 earlier this month, driven mainly by record amounts of money pumped into economies by governments and central banks to ease the coronavirus crisis. The sign traded around $ 33,181 on Thursday – a drop of almost 6% on the day.
As of December 31, BlackRock reported $ 8.68 trillion in assets under management. In December, CEO Larry Fink noted that the world’s most popular cryptocurrency is seeing huge movements daily and could potentially unfold in a global market.
Rick Rieder, chief investment officer of the firm, told Bloomberg shortly thereafter, there is a clear demand for bitcoin and that it will be a part of the investment package for investors for a long time to come.
Not everyone is a fan of cryptocurrencies. U.S. Treasury nominee Janet Yellen, formerly head of the Federal Reserve, said earlier this week that bitcoin and the like are being used “primarily” for illegal activities and their use should be restricted.
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