BlackRock, Inc., one of the world’s largest investment and hedge fund management companies, has reportedly begun exploring investment opportunities in Bitcoin [BTC].
Sources close to the matter have stated that BlackRock has set up a group to investigate ways to take advantage of the cryptocurrency. The financial services giant, which manages around $6.3 trillion in assets, has created a team which is said to include Terry Simpson, an investment strategist who specializes in multiple assets.
Reportedly, he is to consider whether the firm should invest in Bitcoin futures. Futures have been a polarizing asset in the cryptocurrency space, as many state the ‘periodic expiration’ of Bitcoin futures as the reason for the decline in the price of Bitcoin. The San Francisco Federal Reserve published a research paper on the same topic, stating:
“It was not a coincidence to see a rapid run-up and subsequent fall in the price after the introduction of futures. It is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”
Fundstrat’s Thomas Lee also pitched his ideas recently over the polarizing futures debate, stating that it was indeed responsible for the steep plunge of Bitcoin prices in June. This marks the 6 month expiration period offered by CME Group’s Bitcoin futures.
The team is working towards how BlackRock’s competitors will utilize the technology and its impact on the business of the firm. The results will be submitted to senior management, said sources close to the matter.
In contrast to this, the CEO of BlackRock, Larry Fink, stated last year that the cryptocurrency was mainly “speculative”. Fink stated:
“Bitcoin just shows you how much demand for money laundering there is in the world.”
He went on to say that Bitcoin and cryptocurrencies were “far from” an opportunity for institutional investors, especially that none of BlackRock’s clients wanted to invest in it. This comes after a statement by the company that it is “looking at blockchain technology for several years”, even as it declined to comment on cryptocurrencies specifically.
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