As BTC Rises, BlackRock Reveals Bitcoin Position

Copper bitcoin coins against a blue background
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By Landon Manning

After Tesla’s (TSLA) much-publicized investment in the world’s number-one decentralized cryptocurrency, BlackRock Capital (BLK), the world’s largest asset manager, revealed its own investment into bitcoin (BTC).

Bitcoin continues to climb past heights greater than ever before, shortly after Tesla revealed that it had purchased $1.5 billion worth and announced plans to incorporate it into their transaction models for the future.

Since this happened, a dam seems to have broken open in terms of institutional investment. On February 16, 2021, CNBC reported that several more prominent companies, such as Mastercard and BNY Mellon, had also invested in bitcoin. The following day, CNBC then published an interview with Rick Rieder, the chief investment officer of global fixed income at BlackRock. Rieder claimed in this interview that BlackRock had “begun to dabble” in bitcoin, although he would not confirm how much of Blackrock’s $8.68 trillion of managed assets were allocated to the cryptocurrency. Still, it’s safe to say that it does not take many slices off of nearly $10 trillion to equal Tesla’s momentous commitment of $1.5 billion.

Building on his previous comments that bitcoin was “here to stay” and “a durable mechanism that could replace gold,” Rieder stated that bitcoin has shown itself to be a very powerful store of value, despite previous uncertainty and price fluctuations. He claimed that “people are looking for storehouses of value. 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.” 

It is unsurprising that Rieder’s interest in bitcoin seems primarily in its use as a store of value, as BlackRock’s wheelhouse is in asset management, and not fields associated with other use cases such for bitcoin as banking or everyday transactions. Still, Rieder believes that “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,” per CNBC. 

He went on to say that there’s no hard or fast rule for how much any small investor should put into bitcoin, but that people should consider the possibilities of a store of value that is not impacted by inflation.

Fear of missing out, or “FOMO,” is likely to lead many other firms to at least hedge their bets with bitcoin, if not going so far as to make major investments. MicroStrategy, for example, has already begun taking on massive amounts of debt to acquire $900 million worth of the cryptocurrency, in hopes of seeing much larger gains in future trades. 

On February 19, 2021, the total market value of Bitcoin crossed the long-awaited $1 trillion mark, putting another massive feather in its cap. With major asset managers like BlackRock beginning to see bitcoin as sturdy enough to try out, it’s easy to see how these leaps and bounds in valuation will continue.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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