BlackRock opens two funds to bitcoin investments

BlackRock has readied two of its funds to invest in bitcoin futures as the asset manager looks to gain exposure to the cryptocurrency.

Filings to the Securities and Exchange Commission yesterday revealed that the world’s largest asset manager could trade bitcoin derivatives in the $25.4bn BlackRock Strategic Income Opportunities and $15.9bn BlackRock Global Allocation funds.

The funds, both headed up by global fixed income chief investment officer Rick Rieder, will only be allowed to invest in cash-settled bitcoin futures, giving the holder a cash credit once the contract has expired, not a payment in the underlying asset.

Bitcoin was one of the top-performing asset classes last year, rising 300%. It has continued climbing through January, topping $40,000, more than doubling its 2017 all-time high, before falling back to around $33,000.

The digital currency has remained very much on the fringes of mainstream adoption as an asset class, however.

JP Morgan recently said that bitcoin’s limited supply and positioning as an alternative to gold could lead to its price rising above $146,000 in the long term, but the crypto asset’s volatility would have to reduce for this to be realistic.

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