BlackRock Eyes More Bitcoin Exposure as Demand Grows

BlackRock, the world’s largest asset manager, may increase its exposure to Bitcoin in the future, according to one of its top executives. Rick Rieder, the head of global allocation and chief investment officer of global fixed income at BlackRock, said that his funds currently hold a small amount of Bitcoin, but that could change as more people adopt the cryptocurrency as an asset class.

Bitcoin’s Potential and Popularity

Rieder, who oversees about $2.4 trillion in assets at BlackRock, said that he sees Bitcoin’s potential as a store of value and a hedge against inflation and geopolitical risks. He also noted that Bitcoin has become more accessible and acceptable to investors, thanks to the emergence of new vehicles and platforms that facilitate its trading and custody.

“Time will tell whether it’s gonna be a big part of the asset allocation framework,” he said in an upcoming episode of the Wall Street Journal’s Take On the Week podcast. “I think over time, people become more and more comfortable with it.”

Rieder added that as more people adopt Bitcoin as an asset, its upside potential is real, which has been recognized recently. Bitcoin has surged to new highs this year, reaching over $50,000 in February, as institutional and retail demand for the cryptocurrency soared. Some of the factors that have boosted Bitcoin’s popularity include the endorsement of prominent figures like Elon Musk, the launch of Bitcoin exchange-traded funds (ETFs) in Canada, and the adoption of Bitcoin as a treasury reserve asset by some companies.

BlackRock’s Bitcoin Exposure and Strategy

BlackRock, which manages over $9 trillion in assets, has been gradually warming up to Bitcoin and the broader crypto space. The firm’s CEO, Larry Fink, once criticized Bitcoin as an “index of money laundering”, but later praised it as a digital gold and a global asset. Fink has said that BlackRock’s venture into the crypto space aligns with the company’s goal of offering accessible and affordable investment options.

BlackRock is among the entities that recently obtained approval for its spot Bitcoin ETF application in Canada. The ETFs from BlackRock and Fidelity have gained considerable investor attention, amassing over $6 billion since their introduction on Jan. 10. Rieder has previously expressed his belief that Bitcoin could largely replace gold due to its greater functionality and scarcity.

However, Rieder also said that BlackRock’s Bitcoin exposure is very small and that the firm is not actively seeking to increase it. He said that BlackRock’s strategy is to diversify its portfolio across different asset classes and geographies, and that Bitcoin is only one of the many options available. He also said that BlackRock is not interested in Bitcoin as a currency, but rather as an asset class that can provide returns and protection.

“We’re not trying to make a big bet on Bitcoin,” he said. “We’re trying to make a big bet on diversification and trying to find places where we can generate returns for our clients.”