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BlackRock may add more Bitcoin to its portfolio if investor comfort grows

The firm is is cautiously optimistic about Bitcoin's future potential as an asset class.

BlackRock may add more Bitcoin to its portfolio if investor comfort grows (1)

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BlackRock is open to the possibility of increasing its Bitcoin exposure, but several factors, such as adoption and public trust, need to be addressed first, Rick Rieder, BlackRock’s Global Chief Investment Officer of Fixed Income, said in an interview with WSJ. Rieder oversees $2.6 trillion in fixed-income assets at the globe’s largest asset management firm.

“I think that time will tell whether it’s going to be a big part of the asset allocation framework. I think over time people become more and more comfortable with it,” stated Rieder.

Rieder believes people will become more comfortable with Bitcoin, seeing BlackRock’s spot Bitcoin exchange-traded fund (ETF) as the key to increasing accessibility and making Bitcoin easier to manage.

“Today it’s pretty volatile and we use it for when we think there’s some upside potential, more of like an option on something because if there is more and more receptivity now we have more vehicles that people can utilize to get more comfortable with owning it and buying it and selling it and liquidating it,” said Rieder.

According to him, Bitcoin is becoming a more prominent topic in investment discussions, but it might still require further maturation before becoming a mainstream asset allocation choice for most people.

Rieder sees the increasing adoption of Bitcoin as a powerful driver of its future value. He anticipates that as more people use and invest in Bitcoin, its potential for significant growth becomes more realistic, as evidenced by recent price increases.

“As you get more and more people that adopt it as an asset, we think the upside potential is real, which has been recognized recently.”

BlackRock’s newly launched spot Bitcoin ETF currently holds around $5.6 billion worth of Bitcoin, according to data from iShares Bitcoin Trust. Larry Fink, BlackRock’s CEO, views both Bitcoin and Ethereum ETFs as crucial steps toward tokenization, and the firm is seeking approval for a spot Ethereum ETF.

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