Larry Fink, chief executive officer of BlackRock Inc. © 2020 BLOOMBERG FINANCE LP
According to Securities and Exchange Commission filings submitted Wednesday, the BlackRock Global Allocation Fund held 37 futures contracts, which expired on March 26, from the Chicago Mercantile Exchange (CME) worth $6.15 million. The contracts had appreciated by $360,458. The filings match prospectus documents filed with the SEC in January, which showed that BlackRock was eyeing cash-settled bitcoin futures as potential investments for two of its funds, BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund.
Though the investment could be seen as a trial run for the investment giant, which had $8.67 trillion in assets under management at the end of the fourth quarter of 2020, it is yet another testament to bitcoin's widespread institutional adoption.
According to data from CME Group, open interest in bitcoin futures grew by at least 100% for eight months in a row continuing through February. Moreover, the capital locked in these contracts grew at an exponential 1,405% annual rate from $156 million at the end of February 2020 to $2.34 billion in February 2021.
Earlier in March, Goldman Sachs announced the reboot of its cryptocurrency trading desk and an upcoming launch of bitcoin futures trading. A few days later, JPMorgan revealed its bitcoin exposure basket of 11 stocks, including MicroStrategy , CME and Square. Additionally, Morgan Stanley and Goldman Sachs said they would provide their high-net-worth clients with direct access to the cryptocurrency.
To be precise, BlackRock already has some skin in the game through its 16.3% ownership stake in MicroStrategy. MicroStrategy, which trades on Nasdaq, was the first major company to place bitcoin on its balance sheet and currently holds 91,326 BTC worth $5.37 billion.
That said, BlackRock's latest dalliance with bitcoin should not be read as an indication that the asset manager is ready to go all in. As late as January, amid bitcoin's surge, BlackRock's CEO and famed bitcoin skeptic Larry Fink referred to bitcoin as a volatile asset with "a very small market" and still "untested."
The next month, BlackRock's chief investment officer of global fixed income Rick Rieder offered a more bullish outlook: "People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we've started to dabble a bit into it."