BlackRock, an asset management giant, submitted documents to the Securities and Exchange Commission today elaborating its probable move into Bitcoin futures trading.
The documents show that it will only be investing in cash-settled Bitcoin futures on exchanges with the CFTC.
BlackRock is the enormous asset manager in the world, with over $7.8T assets under management. Last July 2018, reports claimed that BlackRock had set up a working group to scrutinize whether it shall move into the Bitcoin futures market.
“Certain Funds may engage in futures contracts based on bitcoin,” every document states, continuing, “The only bitcoin futures in which the Funds may invest are cash-settled bitcoin futures traded on commodity exchanges registered with the CFTC.”
The documents specified two particular funds that now may participate in Bitcoin futures trading. These include the BlackRock Global Allocation Fund and BlackRock Funds V.
The BlackRock Global Allocation Fund invests in equity, debt, and short term securities. The size of the fund is just around $16M. Around 70% of its assets are in securities granted by corporate and government bodies. Its current value is $74.26. In the previous year, it has seen a 19.72% return on investment.
The documents revealed that BlackRock’s fund could start using derivatives, specifying that this includes “currencies – including bitcoin.” It then acknowledges that regulatory changes can affect the futures prices, which can negatively impact the fund.
The firm also accepts a bit of liquidity in the Bitcoin markets, especially with the Bitcoin Futures trading along.
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