BlackRock is testing the crypto waters, granting two of its funds the ability to invest in Bitcoin futures, offering its client exposure to Bitcoin the cryptocurrency.
Filings of the company on the US Securities and Exchange Commission show that BlackRock will include Bitcoin on the list of derivatives cleared for use for its funds BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund Inc.
The two funds may invest only in cash-settled futures traded on the registered commodities exchanges. The SEC filings, however, did not specify the specific Commodity exchange to execute the orders.
Nonetheless, Blackrock warns that the futures carry illiquidity risks due to its newness in the market. Further, it also cautions of regulatory changes, volatility and valuation risks that could affect the price, and adversely impact the fund.
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The Asset Manager’s entry into the Bitcoin market embodies the growing interest in Bitcoin, hallmarked by the cryptocurrency’s price $40,000 all-time high driven by growing interest among both retail and institutional investors.
Analysts at JP Morgan Chase and Co estimate that Bitcoin has the potential to reach up to $146,000 in the long term crowding out gold as an alternative asset.
Bitcoin was trading at $34,236 at 3:44 am New York.
