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REUTERS / Eric Thayer
BlackRock has authorized two of its funds to invest in bitcoin futures contracts, according to documents released to the Securities and Exchange Commission on Wednesday.
This move allows for the first time exposure to cryptocurrencies for clients of the world’s largest asset manager.
The $ 8.7 trillion asset manager has said he may use Bitcoin derivatives, among other assets, as part of the BlackRock and BlackRock Global Allocation Fund strategic income opportunities.
The funds are only allowed to trade bitcoin cash-settled futures contracts, meaning the holder will receive a simple cash credit once the contract expires. These settlements do not require the physical delivery of the underlying asset.
More specifically, BlackRock’s two funds will only trade bitcoin futures contracts that trade on exchanges registered with the Commodity Futures Trading Commission. Right now, the only exchange registered to do so is the CME.
Read more: We spoke to the Winklevoss-backed crypto platform Gemini about Bitcoin, how to use stablecoins and why regulations won’t end the digital currency boom.
Bitcoin hit a record high above $ 41,000 earlier this month, thanks in large part to record amounts pumped into economies by governments and central banks to help ease the coronavirus crisis. The token was trading around $ 33,181 on Thursday, a decline of nearly 6% on the day.
BlackRock reported assets under management of $ 8.68 trillion as of December 31. In December, CEO Larry Fink noted that the world’s most popular cryptocurrency sees giant moves on a daily basis and could potentially expand into a global market.
Rick Rieder, Chief Investment Officer, told Bloomberg shortly thereafter, there is a clear demand for bitcoin and that “it will be part of the asset suite for investors for a long time.”
Not everyone is a fan of cryptocurrencies. Janet Yellen, a candidate for the U.S. Treasury Secretary, who previously headed the Federal Reserve, said earlier this week that bitcoin and the like were “primarily” used for illegal activities and their use should be curtailed.
Read more: Seething behavior is brewing in the markets and Big Tech is reeling from 2 major political events this month – Three investing heavyweights who jointly manage nearly $ 1 trillion explain the impact on these stocks and how to position themselves
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