Blackrock Bets on Bitcoin

BlackRock, a global money management powerhouse, is opening the door to investing in bitcoin futures in a potential boost for all cryptocurrencies. BlackRock is the world’s largest asset manager, with $7.81 trillion in assets under management as of end-Q4 2020.

Securities filings from the investment giant show at least two BlackRock funds may buy bitcoin, a digital currency which has a history of volatility since being introduced over a decade ago but the trajectory has been a solid and rapid rise.

BlackRock said it may buy bitcoin contracts which have been approved by regulators while acknowledging the risks of these investments. The company confirmed this was the first time it has indicated it may invest in the cryptocurrency.

“Bitcoin and bitcoin futures have generally exhibited significant price volatility relative to more traditional asset classes,” the company said in a filing with the Securities and Exchange Commission.

“Bitcoin futures may also experience significant price volatility as a result of the market fraud and manipulation.”

Cryptocurrencies, Decentralized processes and the ever widening impact of Blockchain are going to have a major impact on the way things are done, who does them and who makes the money.

Where there were once huge barriers to entry, the door is now open.

Individuals can now access income from the type of business once reserved for Institutions, Governments and High Net-Worth Individuals. They can through Blockchain, DeFi and P2P protocols became bankers participating in income from trading, brokerage, settlements, fees, mortgages, finance, margin lending and a host of other financial services.

BlackRock noted that bitcoin values “are determined by participants in an online, peer-to-peer network” and that the digital asset is “not backed by any government, corporation, or other identified body.”

The digital currency which is created through a complex computational process known as bitcoin “mining,” has seen its value soar to as high as $40,000 while also seeing plunges of 20 percent in recent years.

Bitcoin and other cryptocurrencies have been linked to nefarious activity on the “dark web” and some inexperienced investors have lost their digital assets.

Despite living on the margins of the investment world, bitcoin has attracted interest from established money managers seeking returns in a market which has been roiled by the global economic crisis.

But such investments are still considered highly speculative.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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