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The BlackRock CIO noted that Bitcoin holds significant potential for future price appreciation. Calling it a speculative tool, Rieder believes it’s good to have Bitcoin in one’s portfolio.
Some of the biggest investments players in the world have started disclosing their exposure to Bitcoin (BTC). On Thursday, September 9, BlackRock CIO Rick Rieder declared that he own a “small piece” of Bitcoin.
Besides, Rieder also believes that the Bitcoin price could go up “significantly” in the future. BlackRock is the world’s largest asset management company with $9.49 trillion in net assets under management. A word from its executive is certainly a vote of confidence for Bitcoin and its investors. Rieder said:
“Part of why I own a small piece of Bitcoin is I do think there are more people who are going to enter that fray over time … I like assets that are volatile that have upside convexity. I could see bitcoin go up significantly but I think it’s volatile”.
Going further, BlackRock CIO also described Bitcoin as an alternative currency. He noted that BTC’s future price movement will depend on its adoption rate. He also noted that Bitcoin holds the potential to serve as a speculative tool.
“But I think it’s volatile. I don’t think it’s a core asset class, like bonds or stocks. But I think it’s more of a speculative tool in the portfolio, and I think there’s some value to that,” he added.
Earlier this year, Rieder already announced that BlackRock has started dabbling into Bitcoin investments.
Besides, it also added BTC futures as investment options for its two funds – BlackRock Global Allocation Fund and the BlackRock Strategic Income Opportunities Fund. Back then Rieder said:
“My sense is the technology has evolved and the regulation has evolved to the point where a number of people find it should be part of the portfolio, so that’s what’s driving the price up”.
Exposure to Bitcoin Mining Companies
BlackRock has been also seeking significant exposure to Bitcoin mining companies. Last month in August, BlackRock purchased a massive $382 million worth of shares combined of Riot Blockchain and Marathon Digital Holdings.
These shares have been spread across hundreds of mutual funds, BlackRock ETFs, and board indexes. This continued interest shown by BlackRock in the crypto space speaks of its affinity towards the crypto market.
BlackRock is not the only player to make such a move in crypto. Several other traditional market players have joined the crypto market through regulated product offerings.