BlackRock is set to dip its considerably massive toes into the world of cryptoassets, according to public filings and reports by a number of outlets.
The gargantuan money manager headed by Larry Fink has filed to offer its clients exposure to bitcoin futures BTC.1, -11.07% through funds, BlackRock Strategic Income Opportunities BSIIX, +0.10% and BlackRock Global Allocation Fund Inc. MALOX, +0.09%, part of the BlackRock Funds V series, according to paperwork submitted with the Securities and Exchange Commission.
The filing states that certain funds may buy futures contracts based on bitcoin and described its focus in the nascent industry as on “cash-settled bitcoin futures traded on commodity exchanges” registered with the Commodity Futures Trading Commission.
The interest in bitcoin futures for the money manager that manages some $8.7 trillion comes as bitcoin prices have been seeing parabolic moves higher, with a pullback in recent days highlighting the inherent volatility in the virtual asset that came into existence just over a decade ago.
Notwithstanding the recent retracement, bitcoin prices BTCUSD, -2.17% on CoinDesk have climbed 21% so far in January after a blistering run-up in 2020.
Bitcoin futures tied to the blockchain asset also have been on the rise, with values up nearly 19% so far this month and 192% higher over the past three months, according to FactSet data tracking the most-active contract traded on the CME Group CME, -1.91%.
BlackRock’s latest moves come after Fink back in December said bitcoin, which has gained greater traction among institutional investors over the past 12 months, has “caught the attention and the imagination of many people.”
Fink said that the distributed-ledger-backed asset could eventually evolve “into a global market,” but described its current status as in its infancy.
Another BlackRock top dog, Rick Rieder, chief investment officer of global fixed income and head of the global allocation team, last month described himself as maintaining a relatively sober view of the popular virtual asset that some bulls say is challenging gold GC00, +0.18% as an alternative investment but said that he believes cryptos are “here to stay.”
It should, perhaps, come as no surprise that BlackRock would wade into bitcoin as an investment. Back in 2018, the money manager assembled a team to explore potential investments in digital currencies and blockchain, the underlying technology that drives cryptocurrencies, the Financial Times reported.
Today’s Insights. Tomorrow’s Implications.
Back then, Fink was less sanguine about bitcoin, saying back in 2018 during a Bloomberg TV interview that he doubted that there was much enthusiasm from client for bitcoins and its ilk. “I don’t believe any client has sought out crypto exposure,” Fink said.
Much has changed and institutional interest in bitcoin has been often credited with helping to lead a fresh run-up in values for the world’s most popular crypto and alternatives to bitcoin, like ether ETHUSD, -4.91% on the ethereum blockchain and Litecoins LTCUSD, -3.01%, a spinoff from the original bitcoin that was written into code in 2009 by a person or persons known as Satoshi Nakamoto.
Bitcoin futures are even newer than the underlying asset it gives investors exposure to.
Cboe Global Markets Inc. CBOE, -1.46% launched its bitcoin futures contract, trading with the symbol XBT back in Dec. 17, 2017, during the initial fervor for all-things crypto that ended with bitcoin teasing a price near $20,000 before collapsing to a low around $3,000.
Rival CME kicked off its bitcoin futures contracts about a week after the Cboe, but two years later the Cboe Futures Exchange pulled the plug on its bitcoin futures experiment rather unceremoniously, noting tepid interest in its contracts and low volumes.