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Blackrock takes first step into crypto exposure in two funds

Blackrock Inc. is adding Bitcoin futures as an eligible investment to two funds, the first time the money manager is offering clients exposure to cryptocurrency.

Photo: OZAN KOSE/AFP / AFP

The world’s largest asset manager filed updated prospectuses for a pair of funds including cash-settled Bitcoin futures among assets they’re permitted to buy. The filings for Blackrock Strategic Income Opportunities and Blackrock Global Allocation Fund Inc. appeared on the U.S. Securities and Exchange Commission website Wednesday.

Derivatives using cash settlement do not require delivery of the underlying asset.

Blackrock, which oversees USD 8.7 trn, is signaling a new willingness to test the waters of Bitcoin. Chief Executive Officer Larry Fink said in a 2018 interview that the firm’s clients weren’t interested in owning crypto. But more recently, executives have shown an increased openness to the asset, which is sometimes compared to digital gold.

A Blackrock spokesperson declined to comment beyond the filings.

Rick Rieder, Blackrock’s chief investment officer for global fixed income, said in a Bloomberg Television interview last year that there’s a clear demand for Bitcoin and that "it’s going to be part of the asset suite for investors for a long time."

The move demonstrates that the asset class is gaining respectability, said Nic Carter, general partner at Castle Island Ventures.

"It’s certainly more evidence for the institutionalization thesis that’s really been the theme of this bull market," he said.

Bitcoin, which surged in the final stretch of 2020, was trading for about USD 34,858 at 3:43 p.m. in New York, according to Bloomberg composite prices.

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