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There seems to be a mix of views coming from institutions regarding Bitcoin as an investment.
On Wednesday, January 20th, BlackRock, the world’s largest asset manager, filed with the U.S. SEC seeking exposure to bitcoin - On the other hand, Barclays oppose Bitcoin adoption, saying, the volatility makes the asset almost 'uninvestable' from a portfolio perspective.
By Tim Copeland - Decrypt
Asset management giant BlackRock submitted documents to the SEC today outlining its potential move into Bitcoin futures trading. The documents show that it will only be investing in cash-settled Bitcoin futures on exchanges registered with the CFTC.
BlackRock is the largest asset manager in the world, with more than $7.8 trillion assets under management. In July 2018, reports claimed that BlackRock had set up a working group to consider whether it should move into the Bitcoin futures market.
BlackRock just filed documents with the SEC that contain extensive discussion of Bitcoin. Excerpt: "Certain Funds may engage in futures contracts based on bitcoin."
This appears to be the first time BlackRock has made such mentions.
Link to filings:https://t.co/qREGtJjIov
— MacroScope (@MacroScope17) January 20, 2021
"Certain Funds may engage in futures contracts based on bitcoin," each document states, adding, "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 specify two specific 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 shy of $16 million. Around 70% of its assets are in securities issued by corporate and government bodies. Its current value is $74.26. In the last year, it saw a 19.72% return on investment.
The documents show that BlackRock's fund may start using derivatives, specifying that this includes "currencies (including bitcoin)." It acknowledges that regulatory changes could affect the prices of the futures, which could negatively impact the fund.
The firm also acknowledges that there is less liquidity in the Bitcoin markets, particularly with Bitcoin futures trading.
Article produced by Tm Copeland - Read the full article:
By MK Manoylov - The Block
Bitcoin’s bull run peak of nearly $40,000 caught the attention of many institutional investors — but Barclays Private Bank chief market strategist Gerald Moser doesn’t seem impressed.
“While it is nigh on impossible to forecast an expected return for bitcoin, its volatility makes the asset almost 'uninvestable' from a portfolio perspective,” Moser told Financial News.
Moser adds that the volatility seen in bitcoin mimics the behaviour of other risk assets like oil. “Many would probably throw the cryptocurrency out of any portfolio in a typical mean-variance optimization.”
“The performance of the cryptocurrency has been mostly driven by retail investors joining a seemingly unsustainable rally rather than institutional money investing on a long-term basis,” Moser said.
Barclays, a large-scale financial service firm in the U.K., had previously shown interest in cryptocurrency and digital asset technology.
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