BlackRock May Start Trading Bitcoin Futures in its Funds

By Tim Copeland

Asset management giant BlackRock submitted documents to the SEC today outlining its potential move into Bitcoin futures trading. The documents show that it will only be investing in cash-settled Bitcoin futures on exchanges registered with the CFTC.

BlackRock is the largest asset manager in the world, with more than $7.8 trillion assets under management. In July 2018, reports claimed that BlackRock had set up a working group to consider whether it should move into the Bitcoin futures market.

"Certain Funds may engage in futures contracts based on bitcoin," each document states, adding, "The only bitcoin futures in which the Funds may invest are cash-settled bitcoin futures traded on commodity exchanges registered with the CFTC."

The documents specify two specific funds that now may participate in Bitcoin futures trading. These include the BlackRock Global Allocation Fund and BlackRock Funds V.

The BlackRock Global Allocation Fund invests in equity, debt and short term securities. The size of the fund is just shy of $16 million. Around 70% of its aassets are in securities issued by corporate and government bodies. Its current value is $74.26. In the last year it saw a 19.72% return on investment.

The documents show that BlackRock's fund may start using derivatives, specifying that this includes "currencies (including bitcoin)." It acknowledges that regulatory changes could affect the prices of the futures, which could negatively impact the fund.

The firm also acknowledges that there is less liquidity in the Bitcoin markets, particularly with Bitcoin futures trading.

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