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BlackRock, the world's largest money manager, has approved its funds to invest in bitcoin futures

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But the funds are likely to invest only in cash-settled bitcoin futures.

BlackRock, the world's largest asset manager, has approved at least two of its funds to invest in bitcoin futures, as it is eyeing the crypto space, according to Blockbeats.

The prospectus was filed with the Securities and Exchange Commission (SEC) on January 20 local timefileShows that BlackRock Global Allocation Fund Inc. and BlackRock Funds V are at least looking at bitcoin. Both funds have Bitcoin's name on their derivatives lists.

BlackRock, which has $7.81 trillion in assets under management, did not say which commodity exchanges it would choose to execute the cryptocurrency futures trades. However, these funds are likely to invest only in cash-settled bitcoin futures. The CME is currently the only exchange registered with the Commodity Futures Trading Commission (CFTC) to offer similar futures products.

However, the documents warned that because of the "relatively new" market, there was a risk that investments in the futures would be illiquid. Regulatory changes, volatility and valuation risks also put pressure on prices, "negatively affecting the fund".

Until now, the investment giant had never mentioned "bitcoin" in any regulatory filing. But that seems to be changing now: "Certain funds may participate in futures contracts based on bitcoin," the fund's prospectus states.

In November, Rick Rieder, the firm's chief information officer for fixed income, told CNBC that cryptocurrencies could be "here to stay" and could even replace gold "in a big way," noting that it is "more functional" than gold. Larry Fink, the company's chief executive, even acknowledged bitcoin's growing popularity, saying it had the potential to become a global market asset last year.

The asset manager also recently posted a job opening for a blockchain and cryptocurrency executive, hiring a vice president of blockchain for its New York office.