BlackRock bought Bitcoin futures in January, suggesting BTC could replace gold

  • A recent filing from the SEC showed that BlackRock held 37 Bitcoin futures contracts in January.
  • The asset manager’s gains from the Bitcoin futures only represent 0.00142% of the total fund’s assets.
  • Rick Rieder, chief investment officer of BlackRock, believes that Bitcoin could take the place of gold. 

A filing from the US Securities & Exchange Commission (SEC) revealed that the world’s largest asset manager has already invested in Bitcoin futures.

BlackRock’s gains from Bitcoin futures was only $360K

In January, BlackRock said that the firm would potentially invest in Bitcoin futures, according to the SEC filings. 

BlackRock’s monthly portfolio investments report recently released by the SEC showed that the firm held 37 Bitcoin futures contracts by the Chicago Mercantile Exchange that expired on March 26. The $6.5 million contracts held by the asset manager appreciated by $360,458.

The firm’s gains from Bitcoin futures only represent 0.00142% of BlackRock’s Global Allocation Fund. As the world’s largest asset manager, the firm holds more than $8.6 trillion in total assets under management. 

Cryptocurrency analyst Alex Kruger hinted at BlackRock’s investment into Bitcoin futures in mid-February. During a leg of the February BTC bull run, Kruger noticed that Bitcoin futures basis was “sky high” and suggested that BlackRock was on the bid. 

Bitcoin futures annualized rolling

Bitcoin futures annualized rolling

The asset manager has come a long way to accepting cryptocurrencies. As CEO Larry Fink stated, BlackRock’s clients were not interested in crypto exposure in 2018. At the time, he said:

Right now I can tell you, worldwide, I have not heard from one client who said ‘I need to be in this.’

In early 2021, Fink told Bloomberg that he was fascinated by the business media attention that Bitcoin was getting and added that Bitcoin could be another store of wealth. For the leading cryptocurrency to be successful, Fink assumes first of all the broadening of the market. 

BlackRock has started to ‘dabble’ in Bitcoin

Rick Rieder, the asset manager’s chief investment officer, mentioned in February that the firm has started to “dabble a bit into” Bitcoin. Emphasizing that Bitcoin could be a store of value, Rieder said:

People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we’ve started to dabble a bit into it.

Rieder did not give a specific target holding of Bitcoin for investors. However, he suggested that allocating some crypto from cash holdings makes sense. The chief investment officer further stated that he believes that Bitcoin could take the place of gold to a large extent. He added:

I think digital currency and the receptivity — particularly millennials’ receptivity — of technology and cryptocurrency is real.

Although a Bitcoin futures contract is not the same as the underlying asset itself, BlackRock joins other large investment management companies, including Fidelity, BNY Mellon and JPMorgan Chase, in offering Bitcoin-related products. Fidelity recently filed paperwork for a Bitcoin ETF. BNY Mellon will add Bitcoin to its custody services. JPMorgan Chase is creating a cryptocurrency basket for clients to invest in companies exposed to Bitcoin.

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