The U.S. Securities and Exchange Commission (SEC) has recently given the green light to BlackRock, the world’s largest asset manager, to add Bitcoin futures as an eligible investment to two of its funds. This ground-breaking move signifies a shift in traditional finance towards the acceptance of cryptocurrencies, particularly Bitcoin. BlackRock’s official statement indicates that only cash-settled Bitcoin futures traded on commodity exchanges registered with the Commodity Futures Trading Commission (CFTC) will be invested in by the BlackRock Global Allocation Fund Inc. and BlackRock Funds V.
The move by BlackRock, which manages over $7.8 trillion in assets, underscores the growing acceptance of Bitcoin as a new asset class. It also suggests a shift in the company’s attitude towards digital currencies. In 2017, BlackRock’s CEO Larry Fink described Bitcoin as an ‘index of money laundering’. Now, with the rising interest in and demand for digital currencies, BlackRock is taking steps to include Bitcoin futures in its investment offerings. This is likely to pave the way for other traditional finance institutions to follow suit.
The SEC’s approval of BlackRock’s decision to include Bitcoin futures in its funds is a significant milestone in the mainstream adoption of cryptocurrencies. It demonstrates the increasing recognition of Bitcoin as a legitimate investment, which may lead to increased institutional investment in the cryptocurrency market. However, BlackRock has warned investors of the risks associated with investing in Bitcoin futures, including illiquidity and volatility. Consequently, it is important for investors to thoroughly understand the potential risks before investing in these assets.
