In brief
- In SEC filings, BlackRock said that two of its funds may at some point incorporate Bitcoin futures.
- Prior, BlackRock had indicated its clients had no interest in Bitcoin.
- The apparent turnaround has crypto insiders abuzz over further potential "institutional adoption."
In new filings with the SEC, BlackRock, one of the largest investment corporations in the world, said that it may incorporate Bitcoin futures in some of its funds.
The news created a frenzy on Crypto Twitter yesterday; with over $7 trillion now under management, BlackRock is a pacesetter for the financial industry, and the crypto community has long been keeping an eye out for signs that it might one day embrace Bitcoin.
Some traders believe the new filings could be a road to just that.
Investing in Bitcoin futures is not the same as investing in cryptocurrencies in and of themselves—they’re futures, which is to say they allow for bets on the price of the asset without a direct purchase. Crypto enthusiasts may have been hoping for a more definitive entry into the space, but yesterday’s filings give no indication that BlackRock is trading Bitcoin at this time.
Blackrock is now jumping into Bitcoin.
This has gone from a contrarian idea to a consensus idea on Wall Street.https://t.co/xOScjnnREz
— Pomp 🌪 (@APompliano) January 20, 2021
Allowing for futures, though, is big in and of itself, according to industry insiders. Alex Wearn, CEO of the crypto exchange IDEX, told Decrypt that BlackRock is “another addition to a long list of institutions that previously dismissed Bitcoin but are now building the legal and operational foundation to trade it. This decision signals demand from their clients to invest in Bitcoin, and that the asset and crypto as a whole are becoming more broadly accepted as an investable asset class.”
The news also represents something of a turnaround for the asset manager.
Back in 2018, BlackRock CEO Larry Fink said clients weren’t interested in crypto at all. “I don’t believe any client has sought out crypto exposure,” he told Bloomberg. “Right now I can tell you, worldwide, I have not from one client who said ‘I need to be in this.’”
In recent months, though, the company has softened its stance. In November, CIO Rick Rieder said in an appearance on CNBC that “crypto is here to stay.”
And last month, an opening for “Vice President, Blockchain Lead” appeared on the BlackRock careers portal. Requirements for the role included “experience in devising and articulating fundamental valuation methodologies for crypto-assets, evaluating game theory and decentralizing governance models associated with blockchain technology.”
And while the new SEC filings don’t clarify if or when the company will embrace Bitcoin, that they’re allowing for futures trading is hope enough for some analysts.
Fink himself recently admitted that Bitcoin has “caught the attention and imagination of many people” as the price has climbed into the $40,000 range.
Amsterdam-based trader Michaël van de Poppe had a bullish take on how things might evolve from here. If BlackRock’s Bitcoin-oriented clients actually start buying into Bitcoin, he said, the influx of activity could further legitimize the market.
Charles Bovaird, of the crypto analytics firm Quantum Economics, told Decrypt that “this latest filing provides one sign that bitcoin's relevance keeps growing.”
Bitcoin futures may feel like a brave new world for the firm, but BlackRock clients have actually been exposed to Bitcoin before, albeit indirectly, through the company’s 15% stake in the tech company MicroStrategy.
MicroStrategy made headlines last year when its CEO, Michael Saylor, pivoted to full-on crypto evangelism, pouring huge amounts of company money into Bitcoin. It’s purchased 70,470 BTC to date, according to data from Bitcoin Treasuries. Those holdings are now worth roughly $2.2 billion, though analysts at Citi downgraded MicroStrategy’s stock last month, citing overreliance on Bitcoin.
A spokesperson for BlackRock declined to comment on the new filings.