BlackRock has started trading Bitcoin futures, according to filings lodged with the U.S. Securities Exchange Commission published yesterday.
BlackRock, the world's largest asset manager, held $6.5 million in Bitcoin futures contracts earlier this year, an unnamed source familiar with the matter told CoinDesk. Those contracts registered a gain of about $360,000 by Jan. 31, when it was reported to the SEC.
The fund held 37 contracts with a March 26 expiry. The contracts were futures offered by the Chicago Mercantile Exchange (CME), which are cash-settled. This means Blackrock did not take possession of any Bitcoin in order to execute the trades. Other providers like Bakkt, from the parent of the New York Stock Exchange, offer physically-settled Bitcoin futures, where the underlying asset is delivered to traders.
In February, BlackRock's chief investment officer Rick Rieder said his firm had "started to dabble" in the Bitcoin markets. He said Bitcoin could potentially act as a hedge against inflation, and as a store of value, despite its current "extraordinary" levels of volatility.
BlackRock had signaled that two of its funds could participate in the Bitcoin markets with filings lodged in January. They were the BlackRock Global Allocation Fund and BlackRock Funds V. The latest filings showing Bitcoin futures trading activity were lodged by the BlackRock Global Allocation Fund.
BlackRock has $7.8 trillion in assets under management. It has been stepping up its interest in the Bitcoin markets. It was recruiting for an executive to lead efforts related to cryptocurrencies in December. The job ad for "vice president, blockchain lead," wanted candidates to devise valuation frameworks for cryptocurrencies and to evaluate governance models on blockchain networks.