Investment management giant BlackRock is the latest major financial player to venture into the Bitcoin market.
In a new interview on CNBC’s Squawkbox, BlackRock CIO of global fixed income Rick Rieder confirms that the world’s largest asset manager with $8.67 trillion assets under management is buying BTC, though he won’t reveal how large the allocation may be.
Rieder says that despite the extraordinary volatility of the king coin, it is attracting investors looking for a store of value.
“I think crypto generally has gotten the imagination of a lot of people. Today, the volatility of it is extraordinary, but listen, 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 into it.”
As Bitcoin continues its bullish run, hitting a new all-time high this week of $52,533, Rieder says crypto’s improving technology and the public sentiment surrounding the industry are working together to push prices higher, showing that a significant portion of investors believe crypto should have a place in one’s portfolio.
“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.”
Although Rieder does not provide guidance on what percentage of one’s portfolio should be in crypto, he notes that it is an appealing option for those with large cash reserves and no truly advantageous hedge.
“We’re holding a lot more cash than we’ve held historically 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.”
BlackRock is not the only major institution that has announced support for crypto of late. Last week, US banking titan BNY Mellon reported that it plans to offer clients access to crypto, integrating both digital asset and traditional financial services.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/Tithi Luadthong