BlackRock to add bitcoin as eligible investment to two funds

The world’s largest asset manager said it could use bitcoin derivatives for its funds BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund Inc.

The funds will invest only in cash-settled bitcoin futures traded on commodity exchanges registered with the Commodity Futures Trading Commission, the company said in a filing to the Securities and Exchange Commission on Wednesday.

Chief Executive Officer Larry Fink had said at the Council of Foreign Relations in December that bitcoin is seeing big giant moves every day and could possibly evolve into a global market. (bit.ly/2XXFHrB).

Fink even acknowledged bitcoin’s rising popularity, saying it had potential to turn into a global market asset last year.

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

Last November, the company’s CIO for fixed income, Rick Rieder, told CNBC that cryptocurrency may be “here to stay,” and could even replace gold “to a large extent,” noting that it was “much more functional” than the yellow metal.

Earlier this month, Bitcoin, the world’s most popular cryptocurrency, hit a record high of $40,000, rallying more than 900 per cent from a low in March and having only just breached $20,000 in mid-December.

A BlackRock spokesperson declined to comment beyond the filings when contacted by Reuters.

BlackRock did not state which commodity exchange it will choose to execute these crypto futures buys. However, the funds may only invest in cash-settled bitcoin futures. CME is the only exchange registered with the Commodity Futures Trading Commission (CFTC) that offers similar futures products at this time.

The price of bitcoin fell slightly on Wednesday, dropping to €28,499 at this writing. The cryptocurrency had been as high as €33,000 this month.

REUTERS