On January 20, BlackRock, the world’s largest asset manager with over $ 8.7 trillion, gave the green light to two partnership funds, BlackRock Global Allocation Fund Inc. and BlackRock Funds, invest in bitcoin futures.
In this regard, prospectus documents submitted to the US Securities and Exchange Commission indicate that BlackRock wants to double Bitcoin (BTC), especially since the first cryptocurrency has ever been added to the company’s list of financial derivatives approved for use.
What’s more, in recent months, CEOs have spoken positively about Bitcoin, citing the fact that a number of organizations may turn to digital assets in the near future to expand their list of financial offerings.
For example, in an interview last November, BlackRock Chief Investment Officer Rick Reeder said that Bitcoin could “pretty much replace gold.” CEO Larry Fink echoed a somewhat similar view, telling the media that Bitcoin has attracted the attention of the masses and has the potential to grow into a separate global market.
Finally, it’s also worth noting that exactly one month ago, BlackRock posted a vacancy announcement looking for a qualified VP, Blockchain Manager for its New York office. Depending on the position, this role required job seekers to develop and implement various strategies that could help “increase the demand for company investment and technology supply.”
What does the BlackRock listing mean to the market?
BlackRock’s investment in Bitcoin futures is an important step forward for the global cryptosystem as it lends tremendous credibility to Bitcoin as a new asset class. Jason Lowe, CEO of cryptocurrency exchange OKCoin, told Cointelegraph that the move will pave the way for other asset managers given that most traditional asset managers are usually “consensus followers”, adding:
“With the announcement of BlackRock, other asset managers will be able to signal BlackRock’s efforts to convince investment committees and client investment advice of the potential and maturity of BTC and the cryptocurrency ecosystem.”
Currently, CME futures and Grayscale and Bitwise issued trusts are the two most important ways organizations can participate in crypto. Because of this strict restriction, institutions received large bonuses in relation to the BTC base rate. For example, Lau stated that during the last BTC price change in December, Grayscale earned a 40% premium to Bitcoin’s base value.
Kyle Samani, managing partner at Multicoin Capital, a dissertation-based investment firm, told Cointelegraph that the BlackRock listing is a big step forward for the entire industry. He believes that by giving some funds the option to buy with BTC, it will allow more investors to join the room.
BlackRock late to the party?
While some welcome news of BlackRock’s entry into the cryptocurrency market, Maksim Blasevich, founder and CEO of Santiment, a market intelligence platform for cryptocurrencies, told Cointelegraph that in terms of purely “behavioral analysis,” headlines aren’t the only thing to consider. …
On the other hand, the reaction of the masses, which is often the most decisive factor in determining the market price, may be more decisive. He added: “The BlackRock listing is not a special event, but just another“ late ”from the“ big money ”fund. This step will have no effect other than greater professionalism and will increase liquidity in the market.
When asked about the impact of the BlackRock listing on the potential stability of Bitcoin’s value, Balashevich noted that despite these “important steps,” the cryptocurrency has remained intact and that there will be many ups and downs in the coming months. “Players like Black Rock are sharks who play against each other,” he said.
Finally, with regard to approaching the saturation point in terms of institutional entry into this space, he believes that the industry is already approaching the top and that “there are not many big players left to enter the market.”
Could SEC Certified Bitcoin ETFs Be On The Horizon?
Historically, the Securities and Exchange Commission (SEC) has rejected a number of ETF proposals – such as those submitted by Phoenix Wilshire, Gemini, etc. – in order to view price manipulation, liquidity shortages, and sources of price indices as important issues. However, with BlackRock entering this space, it looks like the scene may finally be ready for ETF approval sometime in 2021, as Lau pointed out:
“An increasing number of large, respected financial companies such as BlackRock, Guggenheim, SkyBridge, etc. are entering the crypto space and expressing their approval.