In a notable strategic move, BlackRock, the leading asset management firm globally, has filed with the US Securities and Exchange Commission (SEC) to incorporate Bitcoin Exchange Traded Funds (ETFs) into its Global Allocation Fund. This maneuver marks a significant shift for BlackRock towards embracing Bitcoin and signals a broader acknowledgment of cryptocurrency’s role in mainstream investment portfolios.
The filing outlines BlackRock’s intention to invest in Bitcoin ETFs that directly hold BTC, with the aim of tracking the cryptocurrency’s market performance closely. It specifies, “The Fund may acquire shares in exchange-traded products (‘ETPs’) that seek to reflect generally the performance of the price of Bitcoin by directly holding Bitcoin (‘Bitcoin ETPs’), including shares of a Bitcoin ETP sponsored by an affiliate of BlackRock.” Moreover, it emphasizes that any investments in Bitcoin ETPs will be limited to those listed and traded on recognized national securities exchanges.
This strategic move is part of BlackRock’s broader investment strategy for its Global Allocation Fund, a mutual fund designed to offer investors global diversification through a wide range of assets, such as equities, bonds, and potentially Bitcoin ETPs now. With $17.8 billion in assets under management (AUM) and a year-to-date return of 4.61% as of March 7, the Fund aims to leverage global investment opportunities while managing risk and pursuing long-term capital growth and income.
Analysts in the cryptocurrency space have remarked on the significance of BlackRock’s decision. MacroScope commented, “A new filing by BlackRock late this afternoon. As I’ve been saying, you’re going to see a lot of this in the coming months from Wall Street firms for their in-house investment funds.” This sentiment reflects a growing consensus that major institutional investors are poised to enter the cryptocurrency space, potentially driving increased demand and adoption.
A new filing by BlackRock late this afternoon. As I’ve been saying, you’re going to see a lot of this in coming months from Wall Street firms for their in-house investment funds. As filed today by the BlackRock Global Allocation Fund:
“The Fund may acquire shares in…
— MacroScope (@MacroScope17) March 7, 2024
This filing comes on the heels of BlackRock’s previous application to purchase spot Bitcoin ETFs for its Strategic Income Opportunities Fund, indicating a broader strategy by the asset manager to integrate BTC across its diverse range of investment products. Given the strength exhibited by the BTC market, BlackRock’s move into spot BTC ETFs could position its funds to benefit from the digital asset’s potential for high returns.
However, despite the Strategic Income Opportunities Fund’s larger size, boasting an AUM of $36.7 billion, it has shown underperformance this year, with a modest year-to-date gain of 0.59%.
The SEC’s decision on BlackRock’s filings is pending, awaiting approval from chairman Gary Gensler’s commission. Nonetheless, BlackRock’s initiative to include BTC in its funds represents an extremely bullish signal that could encourage other asset managers to explore Bitcoin as a viable component of diversified investment portfolios.
At the time of writing, BTC was trading at $67,500
