BlackRock, the world’s largest asset manager with almost $8 trillion in its AUM, is granting two of its biggest funds to invest in Bitcoin derivatives. The filings for BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund Inc. appeared on the U.S. Securities and Exchange Commission (SEC) website on 20th Jan 2020. The filings are not a total guarantee that BlackRock will add bitcoin futures to the new funds. Although, this comes as a sure shot sign that the investment giant is looking forward to cryptocurrencies. BlackRock to Include Cash-Settled Bitcoin Futures BlackRock’s latest filings indicate the asset manager’s interest in Bitcoin for two of its funds. Both funds have included Bitcoin in their list of derivatives products. The filings indicate that the asset manager wants to include cash-settled Bitcoin futures traded on commodity exchanges registered with the CFTC. However, the investment giant did not specify which commodity exchange it will choose to execute the filing requests. Although, CME is the only exchange registered with the Commodity Futures Trading Commission (CFTC) that offers similar futures products at this time. Meanwhile, BlackRock’s filing did warn the investors of the liquidity risks involved in Bitcoin futures. Their argument is based on the fact that the market is still relatively new. Specifically, that Bitcoin futures are not that heavily traded in comparison to other futures products. Besides, sudden changes in regulation, volatility risks, and illiquidity could impact the prices of the cryptocurrency, which could trickle down into impacting the Fund’s valuation. BlackRock’s CEO Views on Bitcoin Evolved Back then, BlackRock’s CEO Larry Fink was skeptical of Bitcoin, even calling it an index of money laundering. He previously stated that the clients of his firm had no interest in owning any cryptocurrencies. But more recently, his views seemed to have changed favorably towards Bitcoin, suggesting its potential as a leading global market asset. Fink like most of the institutional investors in recent times has taken up into looking at Bitcoin with an open mindset.
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