During a Senate hearing on Tuesday Janet Yellen, Biden's pick to head the U.S. Treasury, expressed concerns that cryptocurrencies could be used to finance illegal activities.
"I think many are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use and make sure that money laundering does not occur through these channels," said the former chair of the U.S. Federal Reserve.
"The action over the last 36 hours or so has largely been rippling outwards from the Janet Yellen comments on crypto," he said, adding that it was still unclear exactly what, if any, moves the Biden administration would take.
BlackRock Inc, the world's largest asset manager, plans to add bitcoin futures to the list of eligible investments for two of its funds, company filings Wednesday show.
Other asset managers are likely to follow in BlackRock's footsteps and add exposure to bitcoin in their go-anywhere or macro strategies as the cryptocurrency market becomes more developed, said Todd Rosenbluth, director of mutual fund research at investment research firm CFRA.
"Itâ€™s easy to see how strong the performance has been of late and look at a historical asset allocation strategy that would have included a slice of crypto and how returns would have been enhanced as a result," he said. "Large institutional investors are going to be able to tap into the futures market in a way that a retail investor could not do." There are currently no U.S.-based exchange traded funds that directly offer exposure to bitcoin.
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