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 that the move enables BlackRock to allocate part of the fund’s $15 billion to cash-settled bitcoin futures traded on commodity exchanges registered with the CFTC.
Global Allocation Fund adopts a fully managed investment policy utilizing U.S. and foreign equity, debt and money market securities, the combination of which are varied from time to time in response to economic trends. In normal market conditions, the primary fund invests at least 70% of its total assets in the securities of corporate and governmental issuers. Based on its past performance, it delivered a 5-year annualized total return of 10.35%, and ranks in the top third among its category peers.
“The Fund may invest in cash-settled bitcoin futures that are traded on commodity exchanges registered with the Commodity Futures Trading Commission,” the filing states.
BlackRock made headlines last year when it added bitcoin futures to derivatives products that two of its funds can invest in. The development came shortly after CEO of BlackRock, Larry Fink, provided a somewhat bullish take on the world’s first cryptocurrency. In a relatively rare endorsement, Fink said Bitcoin has ‘caught the attention’ and could largely replace gold but warned of its growing popularity that has a real impact on the US dollar.
Back then, Fink, who has grown BlackRock into the world’s largest money-management corporation, 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 provides investors with exposure to the crypto and blockchain industry. The company added the Blockchain and Tech ETF (IBLC) to its iShares product line.
BlackRock had inked a partnership deal with the prime brokerage arm of US popular exchange, Coinbase. The collaboration is, however, limited to bitcoin and will allow BlackRock’s institutional clients to have access to crypto trading, custody, prime brokerage, and reporting via Coinbase Prime. The clients are also able to manage their bitcoin and conduct risk analysis using BlackRock’s software suite Aladdin.
BlackRock also participated in $400 million funding round for Boston-based fintech startup Circle. In addition to its investment and role as a primary asset manager of USDC cash reserves, BlackRock entered into a partnership with Circle to explore capital market applications for its stablecoin.