BlackRock Adds Bitcoin to Global Allocation Fund

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BlackRock now offers Bitcoin exposure to ordinary and passive investors in its Global Allocation Fund.

Globally renowned asset manager BlackRock (NYSE:BLK) has added Bitcoin (BTC) to its global allocation fund. Reports indicate that ordinary and passive investors can now gain exposure to BTC through the BlackRock Global Allocation Fund. The coveted fund invests globally in equities, debt securities and short-term securities issued by corporations and governments.

BlackRocks Global Allocation Fund executes these investments without any prescribed limits. In addition, the fund seeks to invest at least 70% of its total assets in these securities of private and government issuers. However, the fund could also choose to invest in equity securities of minor and emerging growth companies. However, the BlackRock Global Allocation Fund demonstrates diversity by investing a portion of its high yield fixed income securities in its debt portfolio. In addition, currency exposure is also managed flexibly.

Adding Bitcoin Could Further Increase BlackRock Fund’s AUM

The BlackRock Global Allocation Fund currently manages approximately $15 trillion in assets, and the addition of Bitcoin is expected to further increase those numbers. Furthermore, this BTC development is also expected to see white-collar people such as nurses and teachers buying Bitcoin alongside other stocks and assets. The fund is generally recommended for white-collar professionals who want to invest their savings but lack the time to follow the market. The reason it sees such a high recommendation value is because of its diverse nature. In addition, the BlackRock Global Fund also tries to track global growth, thereby protecting it from unsavory events in one country.

In a filing, BlackRock said:

The Fund may invest in cash-settled bitcoin futures which are traded on commodity exchanges registered with the Commodity Futures Trading Commission.

The addition of Bitcoin to the BlackRock fund also says a lot about how far the crypto leader has come. The fund is one of the first generalists to add BTC to its package. Furthermore, it also suggests that Bitcoin is now a worthy addition to even a conservative portfolio.

While many other providers also issue global allocation funds, Vanguards Chief Investment Officer Greg Davis said:

While we see value in supporting the technology behind cryptocurrency, we believe it’s best to stick to the investment principles that have made Vanguard a trusted choice for investors. So, when it comes to cryptocurrency, we take the same approach and steer our customers towards proven products.

Davis’ assertion alludes to the well-documented volatility of Bitcoin and most cryptos in general. Additionally, several previous academic studies also explicitly show that Bitcoin increases risk-adjusted returns.

BlackRock Long-Haul Philosophy Plays Well on BTC Price Trajectory

Despite the roller coaster nature of the crypto price trajectory, the BlackRock fund could greatly benefit from the addition of BTC. The reason for this is that the global allocation is intended for long-term investments and Bitcoin returns over at least four years are generally good.

Assumptions abound in the mainstream financial space that other funds could eventually follow BlackRocks’ lead. The possibility of similar funds abounding increases if the BlackRock fund shows significant returns after two years.

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Tolu is a Lagos-based cryptocurrency and blockchain enthusiast. He likes to demystify crypto stories to the essentials so that anyone, anywhere can understand without too much background knowledge. When not immersed in crypto stories, Tolu loves music, likes to sing, and is a movie buff.

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