As per the SEC filing, BlackRock held BlackRock 37 contracts of CME Bitcoin Futures the price of which appreciated by $360,458. The company’s Bitcoin exposure was minuscule in comparison to its $9 trillion AUM.
World’s biggest asset management company BlackRock has now started dabbling into Bitcoin Futures. As per the latest SEC filings published on Wednesday, March 31st, BlackRock 37 contracts of CME Bitcoin Futures earlier this year.
The total value of BlackRock’s Bitcoin futures holdings was only $360,458. This was minuscule representing only 0.001% of its total assets under management. As per the filing, the contract expired on March 26. However, BlackRock’s affinity with Bitcoin is nothing new to the crypto community.
Earlier in January, BlackRock has already intimidated the securities regulator to enter the Bitcoin market. The SEC filing that time noted:
“Each Fund may use instruments referred to as derivatives, which are financial instruments that derive their value from one or more securities, commodities (such as gold or oil), currencies (including bitcoin), interest rates, credit events or indices (a measure of value or rates, such as the S&P 500 Index or the prime lending rate).”
In February 2021, Rick Rieder, BlackRock’s chief investment officer of global fixed income told CNBC about this decision. Rieder said that although Bitcoin’s volatility is high, people are still seeing it as a storehouse of value. He also noted that inflation continues to grow higher and the debts are piling up, the company has started making a move in Bitcoin.
Economic Macros Support Bitcoin and Crypto Investment
The current macroeconomic scenario has put Bitcoin and crypto on a higher pedestal for institutional investors. The fears of upcoming inflation and currency devaluation are further increasing crypto’s odds. Rieder said:
“It’s because duration doesn’t work, interest rates don’t work as a hedge and so diversifying into other assets makes some sense. Holding some portion of what you hold in cash in things like crypto seems to make some sense to me, but I wouldn’t espouse a certain allocation or target holding.”
The recent news about BlackRock comes a day after the big announcement from Goldman Sachs. The Wall Street banking giant said that it will start offering Bitcoin and crypto investment options for its wealth management clients. Mary Rich, the global head of digital assets for Goldman’s private wealth management division told CNBC:
“We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private wealth clients, and that is something we expect to offer in the near term”.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
