Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
BlackRock’s SEC filing suggests that the fund manager is seeking exposure to investing in Bitcoin Futures for two of its funds. The world’s largest asset manager shall be waiting for an SEC nod to invest in Bitcoin (BTC).
In a massive development, the world’s largest asset manager BlackRock has recently filed with the US SEC with its intentions to trade the cash-settled Bitcoin Futures contract. The SEC filing further shows that it will invest only in cash-settled BTC futures on exchanges registered with CFTC.
The document also shows that two funds – BlackRock Global Allocation Fund Inc. and BlackRock Funds V – are eyeing BTC investments. Both these funds have BTC on their list of derivative products cleared for use. The filing also highlights the risks associated with trading Bitcoin Futures. It also mentions the risks involved while trading volatile assets like Bitcoin. The SEC filing from BlackRock notes:
“A Fund’s investment in bitcoin futures may involve illiquidity risk, as bitcoin futures are not as heavily traded as other futures given that the bitcoin futures market is relatively new”.
The filing, however, doesn’t specifically say that BlackRock funds have decided to invest in the Bitcoin future. However, once it has a clear approval from the SEC, the fund manager can jump in anytime it deems fit. Thus, BlackRock is currently laying the regulatory foundation to participate in this market. This development has certainly speaker excitement in the crypto sphere.
Last month, BlackRock CEO Larry Funk said that Bitcoin (BTC) is slowly emerging as a threat to the US Dollar and simultaneously maturing as a legitimate asset class. He also added that Bitcoin is “here to stay” and could replace gold “to a large extent”.
Interestingly, this development comes just on the day as Biden administration take the charge.
Yellen Calls for ‘Curtailing’ Cryptos Like Bitcoin amid New Move by BlackRock
Former chair of Federal Reserve and the US Treasury Secretary Janet Yellen has called the need to curtail cryptocurrencies like Bitcoin. Jennet said that Bitcoin and other cryptocurrencies facilitate “illicit” activities like money laundering.
Yellen’s comments suggest that the Biden administration could soon introduce crypto regulations while staying hostile to the asset class. Recently, many big financial institutions and their leaders have expressed concerns about the use of cryptocurrencies. When Sen. Maggie Hassan asked Yellon about the use of crypto in terrorism financing, she said:
“You’re absolutely right that the technologies to accomplish this change over time, and we need to make sure that our methods for dealing with these matters, with terrorist financing, change along with changing technology. Cryptocurrencies are a particular concern. I think many are used – at least in a transaction sense – mainly for illicit financing. And I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.”
Last week, ECB President Christine Lagarde also called Bitcoin (BTC) a speculative asset and something that facilitates money-laundering.