BlackRock dabble in bitcoin
With $8.7 trillion in its piggy bank, BlackRock's "dabble" could be everyone else's "jump in head first" (Photo: Twitter)
Bitcoin

‘We’ve started to dabble in’ Bitcoin: BlackRock’s Rick Rieder

The chief investment officer at the world’s largest asset manager said Bitcoin is appreciating in reaction to investors looking to protect themselves from inflation

By  / February 17, 2021 /

Rick Rieder, the chief investment officer of global fixed income at world’s top asset manager BlackRock, said that the firm has started engaging with Bitcoin.

According to a Feb. 17 CNBC report, Rieder said that BlackRock—which was managing $8.68 trillion at the end of 2020—“started to dabble” in Bitcoin.

Speaking of Bitcoin in an interview Feb. 17, he said that “the volatility of it is extraordinary, but listen, people are looking for storehouses of value.” He added:

“People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we’ve started to dabble a bit into it.”

As Modern Consensus reported, in late January BlackRock filed notice with the U.S. Securities and Exchange Commission that its BlackRock Funds V and BlackRock Global Allocation Fund had added bitcoin futures to their eligible investments, both for speculation and hedging. Rieder said he believes that the fundamentals surrounding Bitcoin have changed in a way that make it a viable investment choice:

“My sense is the technology has evolved and the regulation has evolved to the point where a number of people find it should be part of the portfolio, so that’s what’s driving the price up.”

Those remarks closely resonate with the words spoken by famous investor Raoul Pal earlier this month. As Modern Consensus reported, Pal said that Bitcoin is “basically eating the world” and explained, “I have never seen this before in my career where an asset has drawn the attention of the likes of Elon Musk and mainstream institutions like no other asset.”

Not everyone agrees. JPMorgan analyst Nikolaos Panigirtzoglou called Bitcoin’s rise “unsustainable” if volatility doesn’t decrease in a Feb. 16 investors note.

Rieder also hinted at an overall situation in the markets that makes BlackRock’s portfolio more compatible with a Bitcoin investment. He explained that the asset manager is holding much more cash than it usually held during the over 30 years that it operated:

“It’s because duration doesn’t work, interest rates don’t work as a hedge and so diversifying into other assets makes some sense. Holding some portion of what you hold in cash in things like crypto seems to make some sense to me, but I wouldn’t espouse a certain allocation or target holding.”

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Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.