BlackRock exec on bitcoin: 'We are seeing bubble-like valuations'

Tom Szczerbowski/Getty Images
  • BlackRock Asian executive says bitcoin “isn’t a financial asset like we would trade.”
  • Comments come after the launch of first bitcoin futures on Sunday.

LONDON – BlackRock has become the latest financial services company to express caution over bitcoin.

Bloomberg reported that Belinda Boa, BlackRock’s head of active investments for Asia-Pacific, told reporters: “We are seeing sort of bubble-like valuations. BlackRock’s view is that this isn’t a financial asset like we would trade in terms of equities and fixed-income instruments.”

Derivatives exchange operator Cboe launched bitcoin futures on Sunday evening, giving institutional investors exposure to the digital currency. Over $US60 million-worth of contracts were purchased in the first 24 hours but volumes have tailed off significantly.

Several banks such as JPMorgan and Citi have said they will not clear bitcoin futures contracts for clients, at least initially. JPMorgan CEO Jamie Dimon has been a vocal critic of bitcoin in the past, calling it a fraud. The Futures Industry Association has also complained about the risks of bitcoin futures.

Bitcoin has risen over 1,000% against the dollar so far this year and the phenomenal rise has led to increased interest from Wall Street.

However, some fear bitcoin’s price rise could be unsustainable. Joseph Borg, president of the North American Securities Administrators Association, said on Monday that he has seen people taking out mortgages just to buy bitcoin.

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