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BlackRock considering crypto opportunities

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Peter Terlato
Posted: 16 July 2018 1:41 pm
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The $6 trillion investment company is eyeing the potential of bitcoin futures and blockchain technology.

Global investment management corporation BlackRock has established a working group to examine the burgeoning cryptocurrency market and its associated technology, blockchain, despite initial apprehension.

Financial News London reports that the company has brought together experts from various teams to form the group to explore the possibilities tied to bitcoin futures, according to two people familiar with the matter.

The sources also revealed that the working group will research the actions of competing businesses within the realm of digital currencies and carefully scrutinize the ways in which these moves could impact operations.

All findings will be presented to senior management officials.

Since 2015, BlackRock has maintained a working group focused on investigating blockchain developments.

The company’s new interest in cryptocurrency is a stark reversal from its leader’s initial assessment. Late last year, BlackRock chief executive Larry Fink described bitcoin as an evasive, “speculative” investment.

“It is an instrument people use for money laundering,” he said.

However, he also is a “big believer” in the potential of cryptocurrency and the “opportunities” it can afford.

BlackRock manages in excess of $6 trillion worth of assets for its clients. For comparison, the total market capitalization of all cryptocurrencies globally is $417 billion, down from $800 billion in December last year.

In early May, reports emerged that American multinational investment bank Goldman Sachs was planning on starting to trade bitcoin futures contracts on behalf of its clients and create new, flexible forwards contracts.

In April, Cboe Futures Exchange (CFE) petitioned the Commodity Futures Trading Commission (CFTC) to lower the minimum buy and sell prices of its futures contracts, just a few months after launching the products.

Cryptocurrencies have often been touted as the future of money. However, given their continued proliferation, volatility, security and privacy issues and regulatory barriers, mainstream adoption has yet to transpire.

However, a research report released by global trading giant eToro and Imperial College London suggests currency has evolved significantly over time and that digital currencies already fulfill one of three major criteria to be considered as money and that the widespread use of such tokens is a natural next step in the process.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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