The BlackRock CIO stated that Bitcoin has a high potential for price appreciation in the future. Rieder considers Bitcoin to be a speculative tool and believes it is beneficial to have it in one’s portfolio.
Some of the world’s largest investment firms have begun to disclose their exposure to Bitcoin (BTC). On September 9, BlackRock CIO Rick Rieder announced that he owns a “small piece” of Bitcoin.
Furthermore, Rieder believes that the Bitcoin price will rise “significantly” in the future. With $9.49 trillion in net assets under management, BlackRock is the world’s largest asset management firm. A word from its CEO is unquestionably a vote of confidence in Bitcoin and its investors. Rieder stated:
“One of the reasons I own a small amount of Bitcoin is that I believe more people will join the fray over time… Volatile assets with upside convexity appeal to me. I believe bitcoin will rise significantly, but I believe it will be volatile.”
Furthermore, BlackRock CIO referred to Bitcoin as an alternative currency. He stated that the future price of Bitcoin will be determined by its rate of adoption. He also mentioned that Bitcoin has the potential to be used as a trading tool.
“However, I believe it is volatile. It is not, in my opinion, a core asset class like bonds or stocks. However, I believe it is more of a speculative tool in the portfolio, and I believe it has some value,” he added.
Rieder announced earlier this year that BlackRock has begun dabbling in Bitcoin investments.
Furthermore, BTC futures have been added as investment options for its two funds, the BlackRock Global Allocation Fund and the BlackRock Strategic Income Opportunities Fund. Rieder stated at the time:
“My sense is that the technology and regulation have evolved to the point where a number of people believe it should be part of the portfolio, which is what is driving the price up.”
Exposure to Bitcoin Mining Firms
BlackRock is also interested in gaining significant exposure to Bitcoin mining companies. In August, BlackRock paid $382 million for a combined $382 million in shares of Riot Blockchain and Marathon Digital Holdings.
These shares have been distributed across hundreds of mutual funds, BlackRock ETFs, and stock exchange indexes. BlackRock’s continued interest in the crypto space demonstrates its affinity for the crypto market.
BlackRock is not the only crypto player to make such a move. Several other traditional market participants have entered the crypto market via regulated product offerings.