One of the world’s largest asset managers, BlackRock, recently broke the news that it will add Bitcoin as an eligible investment in its funds.
The investment will be eligible on Global Allocation Fund, the fund invests globally in equities, debt securities and short-term instruments of both public and private issuers, without limitation.
The news was also leaked through the discovery of the company’s deposit of 15 billion in Bitcoin futures registered with the CFTC.
BlackRock’s investment in Bitcoin
BlackRock executives state:
“The Fund may invest in cash-settled bitcoin futures that are traded on commodity exchanges registered with the Commodity Futures Trading Commission.”
This $15 billion investment fund will be dedicated to investing in tokens, securities and debt obligations and will be able to allocate part of its funds to cash-settled Bitcoin futures traded through exchanges registered with the US Commodity Futures Trading Commission (CFTC).
What does the integration of Bitcoin into this investment fund mean?
Such a globally important fund could accelerate Bitcoin’s institutional entry into the global market.
The exposure that BlackRock’s Global Allocation Fund will give the currency will make it even more visible, which would result in more optimism for the future of the oldest cryptocurrency.
BlackRock’s bet on Bitcoin is not a new one; rather, as early as last year, the firm added Bitcoin futures to the derivative products in which some funds could invest.
In the second half of the year, BlackRock opened the door to direct investments in Bitcoin, allowing its investors to invest and gain exposure to the cryptocurrency in the spot market through a private cryptocurrency investment fund.
The growing demand from BlackRock’s cryptocurrency investors has prompted the asset manager to once again take a big step into the world of blockchain.
Thus arriving to launch new services, through large investments in Bitcoin custody and trading.
Larry Fink, CEO of BlackRock, during an interview with CNBC in 2021, revealed:
“I think there is a very important role for a digitized currency (Bitcoin), and I think it will help consumers around the world.”
His vision with respect to Bitcoin’s future is undoubtedly very optimistic.
BlackRock and the rescue of Core Scientific
Following the various crises crypto exchange platforms have experienced, Bitcoin miners have also been in trouble.
For instance, Core Scientific Inc. ended up in bankruptcy. Nevertheless, the miners will continue to work and be operational, thanks to BlackRock.
In fact, the asset manager said it has lent $17 million to the US trading company, allowing it not to go completely bankrupt.
Clearly, the reason for the loan stems from the fact that the BlackRock asset manager holds funds and accounts tied to Core Scientific Inc. or related subsidiaries.
Certain sources explain that BlackRock also holds $37.9 million in secured convertible bonds of Core Scientific Inc.
The first bankruptcy risks came in late October, after the Texas-registered company defaulted on its loan payments and causing its shares to fall nearly 80%.
By November the situation was critical once again, in fact it declared that it might run out of funds by the end of 2022.
On 21 December, Core Scientific, no less than one of the largest miners by computing power, filed for bankruptcy (Chapter 11), crushed by high energy costs and low Bitcoin (BTC) prices.
In short, BlackRock’s connection to Bitcoin is increasingly solid; the future of Bitcoin is also in the hands of investment tycoons like Larry Fink and his firm.