BlackRock Takes First Steps Into Bitcoin Market

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BlackRock to enter the Bitcoin market

BlackRock Takes First Steps Into Bitcoin Market

The world’s largest money manager, BlackRock Inc. has taken its first steps into the Bitcoin market after adding Bitcoin (BTC) futures as an eligible investment to two of its funds.

The investment management firm has submitted both the BlackRock Funds V and BlackRock Global Allocation Fund, Inc. filings to the SEC, both saying they ‘may engage in futures contracts based on bitcoin.’

The filings are for cash settled Bitcoin futures, and therefore, do not require BlackRock to custody the underlying asset.

In the filings BlackRock requested the funds be open for trading derivatives from ‘securities, commodities (such as gold or oil), currencies (including bitcoin), interest rates, credit events or indices (a measure of value or rates, such as the S&P 500 Index or the prime lending rate).’

The New York-based money manager highlighted illiquidity, valuation and volatility challenges as potential risks in the filing, with the Bitcoin cash settled futures markets a nascent and relatively small market.

Blackrock bitcoin BTC futures

BlackRock Entering The Bitcoin Market Comes As No Surprise

There has been no comment from anyone within the company on the filings, but the move into the Bitcoin market by BlackRock hasn’t come as a surprise to anyone keeping up with what’s happening in and around the Bitcoin market.

BlackRock CEO Larry Fink recently spoke about the company’s clients showing a much deeper interest in Bitcoin. 

And speaking on live a debate with Mark Carney, the former governor of the Bank of England, Fink said he believed ‘Bitcoin could evolve into a global market asset.’

Paxful Peer-to-peer Bitcoin exchange

BlackRock’s CIO Rick Rieder has been making “Bitcoin headlines” of late, also. Speaking on a CNBC interview, Rieder said Bitcoin wasn’t only here to stay but would one day rival gold.

‘Bitcoin will take the place of gold to a large extent [because] it is so more functional than passing a bar of gold around,’ said the BlackRock CIO.

BlackRock Is MicroStrategy’s Largest Shareholder

It should also be noted that BlackRock Inc. is the largest shareholder in MicroStrategy, the company which invested $1.125 billion of its liquid treasury into Bitcoin.

BlackRock owns 16.57% of MicroStrategy (MSTR), and will have been at the head table for the investors meetings when MicroStrategy CEO Michael Saylor applied to adopt a Bitcoin standard.

BlackRock is MicroStrategy's largest investor

Saylor said in an interview he explained to his shareholders how the company was moving forward and offered every investor a premium on their investment if they weren’t happy with the direction it was going in.

Very few shareholders took him up on his offer, said Saylor. And with the $MSTR price rising more than 450% since first announcing it was to keep the vast majority of its liquid treasury in Bitcoin, BlackRock has done very well from it.

The Wall Street Herd Is Coming

BlackRock’s first tentative direct move into the Bitcoin market comes as no surprise to anyone connected with the world’s only decentralised currency.

They are part of the expected institutional herd that started gaining pace last year, and one that is changing the face of the Bitcoin market.

Institutions are here, and as the Bitcoin market grows, more will come. With trillions AUM, BlackRock is the biggest money manager in the world and they have to “play it safe”.

Through MicroStrategy, BlackRock has had exposure to Bitcoin for a while, and its CEO and CIO know what is coming, so them taking a tentative position is just the beginning.

Author: Tommy Limpitlaw

BuyBitcoinswithVisaMcCard

Bitcoin FAQs

Why should I buy Bitcoin?

Bitcoin is a peer-to-peer money that nobody can manipulate. It’s all set in the Bitcoin codebase which is secured by hundreds of thousands of computers all around the world. Bitcoins can be sent by anybody and no third party is need to verify the transactions, and nobody can stop Bitcoins being sent.

Can you buy less than 1 Bitcoin?

Yes. Every Bitcoin can broken down into 100 million bits. They are known as satoshis, after the pseudonymous creator Satoshi Nakamoto. And some companies will let you buy as little as $1 worth of Bitcoin, which at time of writing is worth about 11,000 satoshis. There are many companies that have a system for dollar cost averaging (DCA). This is a great way to buy Bitcoin, and is known in the space as ‘Stacking Sats’. Basically, what you do is set up small automatic, recurring payments to buy Bitcoin (or sats), and you DCA over time.

How do you make money with Bitcoin?

There are many ways to make money with Bitcoin. The most obvious way is to mine Bitcoin. Bitcoin mining is the process of verifying transactions, and helping to secure the Bitcoin network. Bitcoin miners are rewarded with bitcoins for their work.

Where can I buy Bitcoin in The Netherlands?

You can buy Bitcoin in many places in Netherlands even though the government seems to be taking a negative approach to it. It’s always good to do some research, as there are some questionable exchanges in any nation. Paxful or CEX are two global platforms that allow buyers to purchase Bitcoin in many different currencies.

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