BlackRock, which was founded in 1988, started with just eight people working in one room. It made its Initial Public Offering on the New York Stock Exchange on 1 October 1999 at $14 a share.In 2006, BlackRock acquired Merrill Lynch Investment Management. Then in 2009, it acquired Barclay’s Global Investors (BGI), “becoming the world’s largest asset manager, with employees in 24 countries.” As of the end of Q2 2021, BlackRock had roughly $9.5 trillion in assets under management (AUM).
Rieder is BlackRock’s Chief Investment Officer of Global Fixed Income, Head of the Global Allocation Investment Team in the Multi-Asset Strategies Group, a member of BlackRock’s Global Operating Committee, and Chairman of the firm-wide BlackRock Investment Council.
Rieder made his comments during an interview with Andrew Ross Sorkin, a co-anchor of CNBC’s “Squawk Box”.
Here is what Rieder had to say about Bitcoin:
“You know, people describe it as a hedge or an alternative. I’m not sure it’s a really great hedge. I mean the correlation to equities or correlations to risk assets. I’m not sure it’s a great hedge when an asset moves 10 to 15% a day. Really hard to hedge big, organic asset pools with that as a hedge.
“Is it an alternative currency?… Part of why I own a small piece of Bitcoin is I do think there are more people that are going to enter that fray over time. We have a very moderate position in our portfolio. I like assets that are quite frankly that are volatile, that have upside convexity, and I could see Bitcoin… go up significantly.
“But listen, I think it’s volatile. I don’t think it’s a core asset class. like bonds are, like stocks are, but I think… to have a bit as more of a speculative tool in a portfolio, yeah, I think there’s some value to that.”
The most interesting part of the above interview is that this appears to be the first time that BlackRock has revealed that it owns some Bitcoin. Back in November 2020, the BlackRock CIO said that he didn’t own any Bitcoin in any of his portfolios.
When on November 20, during an interview on CNBC’s Squawk Box,Rieder was asked if he agreed with Jamie Dimon, Chairman and CEO of JPMorgan Chase (who thinks that the U.S. government will try to regulate Bitcoin if its price gets too high), he replied:
“I think cryptocurrency is here to stay, and I think it is durable… I think digital currency and the receptivity — particularly, millennials’ receptivity of technology and cryptocurrency — is real… Digital payment systems is real. So, I think Bitcoin is here to stay… I don’t do a lot of it or actually any of it in my portfolios…
“But do I think it’s a durable mechanism that will take the place of gold to a large extent? Yeah, I do because it’s so much more functional than passing a bar of gold around…”
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
By: Siamak Masnavi