BlackRock Makes Qualifying Bitcoin Investment in $15 Billion Fund

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BlackRock, the world’s largest asset manager, is adding bitcoin as an eligible investment to its flagship global allocation fund, which is one of the most preferred vehicles for ordinary and passive investors.

A company filing shows the move allows BlackRock to allocate a portion of the $15 billion fund to cash-settled bitcoin futures contracts traded on CFTC-registered commodity exchanges.

Global Allocation Fund adopts a fully managed investment policy utilizing US and foreign equity, debt and money market securities, the mix of which varies from time to time in response to economic trends. Under normal market conditions, the main fund invests at least 70% of its total assets in securities of private and government issuers. Based on its past performance, it has achieved a 5-year annualized total return of 10.35% and ranks in the top third among its peers in the category.

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

BlackRock made headlines last year when it added bitcoin futures to the derivative products that two of its funds can invest in. The development came shortly after BlackRock CEO Larry Fink provided a somewhat bullish view of the world’s first cryptocurrency. In a relatively rare endorsement, Fink said Bitcoin has caught the eye and could largely replace gold, but cautioned its growing popularity is having a real impact on the US dollar.

At the time, Fink, who made BlackRock the largest fund management company in the world, dismissed bitcoin as nothing more than a vehicle for speculation and money laundering.

The world’s largest asset manager launched a blockchain-focused ETF in April that offers investors exposure to the crypto and blockchain industry. The company has added the Blockchain and Tech ETF (IBLC) to its iShares product line.

BlackRock had signed a partnership agreement with the main brokerage arm of the popular American exchange, Coinbase. The collaboration is limited to bitcoin, however, and will allow BlackRocks institutional clients to have access to crypto trading, custody, prime brokerage and reporting through Coinbase Prime. Customers can also manage their bitcoin and perform risk analysis using the BlackRocks Aladdin software suite.

BlackRock also participated in a $400 million funding round for Circle, a Boston-based fintech startup. In addition to its investment and role as the primary asset manager of USDC’s cash reserves, BlackRock has partnered with Circle to explore capital market applications for its stablecoin.

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