BlackRock, the world’s largest asset manager with $ 7.81 trillion in assets under management, appears to have given at least two of its funds the opportunity to invest in Bitcoin futures.
Prospectus documents Filed with the Securities and Exchange Commission on Wednesday, BlackRock Global Allocation Fund Inc. and BlackRock Funds V are at least pointing out Bitcoin. Both have added the world’s oldest cryptocurrency to their list of approved derivatives.
BlackRock did not specify for which commodity exchange these Crypto-Futures purchases should be executed. However, the funds are only allowed to invest in cash-settled bitcoin futures. CME is the only exchange registered with the Commodity Futures Trading Commission (CFTC) that currently offers similar futures products.
The documents submitted warn that investments in these futures could involve illiquidity risks due to the “relatively new” market. Regulatory changes, volatility and valuation risks could similarly weigh on the price and thus “adversely affect a fund”.
The filings appear to mark BlackRock’s entry into the Bitcoin market.
Before Wednesday, the investment giant did not mention “Bitcoin” in any of its approval applications. However, this seems to be changing: “Certain funds can enter into futures contracts based on Bitcoin,” says the prospectus documents.
Last November, Rick Rieder, the company’s CIO for fixed income, told CNBC that cryptocurrency may “stay here” and even replace gold “largely,” noting that it is “much more functional” than the yellow metal.
CEO Larry Fink even recognized Bitcoin’s growing popularity, saying it had the potential to become a global market value over the past year.
The asset manager recently advertised a position for a blockchain and crypto executive looking for a vice president of blockchain for his New York office.
Candidates for the position should be able to create valuation models for cryptocurrencies, but also evaluate governance models and other aspects of the underlying technology, the publication said.
UPDATE (January 20, 2021, 10:20 PM UTC): Updated with additional context.
