In March of this year, BlackRock – the world’s largest asset manager with $6.84 trillion in assets under management – filed an amendment with the U.S. Securities and Exchange Commission (SEC) to change one of its investment funds to allow it to invest in cryptocurrency.
This move led many to believe that the firm was preparing to launch a Bitcoin exchange-traded fund (ETF). However, BlackRock has since denied these claims, saying that it has no plans to launch a cryptocurrency ETF.
So, what caused the confusion? And does BlackRock have any plans to enter the cryptocurrency space? Let’s take a closer look.
The amendment filed by BlackRock related to one of its existing investment funds, the Global Allocation Fund, which is a “multi-asset” fund that can invest in a variety of asset classes including stocks, bonds, and cash. The amendment stated that the fund may now invest up to 5% of its assets in “collective investment vehicles” (CIVs) that hold cryptocurrency.
A CIV is a type of investment vehicle that pools money from multiple investors and invests it in a variety of assets. The most well-known CIV is probably the mutual fund.
NOTE: Warning: Investing in a Bitcoin ETF is a high-risk investment. Bitcoin ETFs are not regulated by the SEC and therefore may be subject to extreme price fluctuations, illiquidity, and potential fraud. Furthermore, investing in a BlackRock Bitcoin ETF carries additional risks as there is no guarantee that such an ETF will be approved by the SEC and even if it is approved, there is no assurance that it will be successful or profitable. As always, investors should research any potential investments carefully before committing funds.
BlackRock already offers several mutual funds that invest in Bitcoin and other cryptocurrencies.
The amendment led many to believe that BlackRock was preparing to launch its own Bitcoin ETF. An ETF is a type of CIV that trades on an exchange like a stock.
ETFs are typically more liquid than other CIVs and have lower fees. They are also often seen as being more transparent than other CIVs because they must disclose their holdings daily.
However, BlackRock has since denied these claims, saying that it has no plans to launch a cryptocurrency ETF. In an interview with CNBC, BlackRock CEO Larry Fink said that while the firm is “exploring” blockchain technology, it has no interest in launching a cryptocurrency product because it does not believe cryptocurrencies are “legitimate investments.”
So, it appears as though BlackRock has no plans to launch a cryptocurrency ETF at this time. However, this doesn’t mean that the firm isn’t interested in the space.
It’s possible that we could see BlackRock launch other cryptocurrency products in the future if it believes there is enough demand from its clients.
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