BlackRock Gives 2 Funds to Invest in Bitcoin Futures

BlackRock, the world’s largest asset manager with $ 7.81 trillion under management, seems to have given at least two of its funds the ability to invest in bitcoin futures.

Prospectus documents filed with the U.S. Securities and Exchange Commission on Wednesday indicate that BlackRock Global Allocation Fund Inc. and BlackRock Funds V at least eyeing bitcoin. They both include the world’s oldest cryptocurrency on their cleared derivative product lists for use.

BlackRock did not specify which commodity exchange it will choose to operate these crypto futures purchases on. However, the funds can only invest in a bitcoin-settled future with cash. CME is the only exchange registered with the Commodity Futures Trading Commission (CFTC) offering similar futures products at this time.

The filing warns that investments in this future could lead to inability risks due to the “relatively new” market. Similarly, regulatory changes, volatility and pricing risks could weigh up the price and thus “adversely affect a Fund.”

The filing appears to indicate BlackRock’s entry into the bitcoin market.

Before Wednesday, the investment giant has never mentioned “bitcoin” in any of its regulatory filings. But that seems to be changing: “Some Funds may enter into bitcoin futures contracts,” prospectus documents state.

In November last year, the firm’s CIO for fixed income, Rick Rieder, told CNBC that cryptocurrency could be “here to stay,” and that it could even replace gold “to a large extent,” noting that it is “a lot more functional ”than the yellow metal.

CEO Larry Fink even acknowledged the growing popularity of bitcoin, saying it had the potential to turn into a global market asset last year.

The asset manager recently posted a job opening for a blockchain and crypto executive, seeking a blockchain vice president for its New York office.

Applicants for the job should be able to create pricing models for cryptocurrencies, but also evaluate governance models and other aspects of the underlying technology, the posting said.

UPDATE (January 20, 2021, 22:20 UTC): Updated with additional context.