BlackRock Seeks Spot Bitcoin ETFs for its Major Funds
BlackRock has made significant strides in incorporating Bitcoin into its investment strategies. Recently, the world’s largest asset manager has sought approval from the US Securities and Exchange Commission (SEC) to include spot Bitcoin ETFs in two of its major funds- the BlackRock Global Allocation Fund (MALOX) and the BlackRock Strategic Income Opportunities Fund (BSIIX).
BlackRock’s Global Allocation Fund Eyes Spot Bitcoin ETFs
The BlackRock Global Allocation Fund, launched in 1989, offers investment returns through a diversified portfolio of US and international equities, debt, and money market securities. With over $17.8 billion in assets under management as of March 7, 2024, MALOX is a substantial fund.
A recent update to MALOX’s SEC filing reveals BlackRock’s intention to include physically-backed Bitcoin ETFs as part of its investment strategy. This update specifies that MALOX may invest in:
- BlackRock’s spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT)
- Spot Bitcoin ETFs offered by other issuers
However, the filing clarifies that the fund will only consider ETFs listed and traded on national securities exchanges to ensure a level of regulatory oversight.
BlackRock’s Strategic Income Opportunities Fund Seeks Similar Inclusion
BlackRock submitted a similar SEC filing just days before the MALOX update, seeking to include spot Bitcoin products within the BlackRock Strategic Income Opportunities Fund (BSIIX). This non-traditional bond fund, launched in 2021, primarily invests in fixed-income securities but also has the flexibility to incorporate alternative assets considered beneficial by its portfolio managers. Notably, in 2021, BlackRock had already received approval to include Bitcoin futures within BSIIX.
The recent filing suggests BlackRock’s growing confidence in the potential of Bitcoin as an investable asset class. By seeking to add spot Bitcoin ETFs to both MALOX and BSIIX, BlackRock offers its clients exposure to Bitcoin through various fund structures, catering to different investment objectives.
BlackRock’s iShares Bitcoin Trust (IBIT)- A Standout Performer
BlackRock’s own spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT), launched in January 2024 alongside several other spot Bitcoin ETFs in the United States. IBIT has emerged as the leader in this space, with tremendous growth. As of March 7, 2024, IBIT’s Bitcoin holdings surpassed 187,531 BTC, representing a 7,000% increase from its launch date.
BlackRock’s Bitcoin Strategy- Diversification and Growth
BlackRock’s move to incorporate spot Bitcoin ETFs into its funds suggests a multi-faceted strategy:
- Diversification- By including spot Bitcoin ETFs from various issuers, BlackRock offers investors exposure to a broader segment of the Bitcoin market to mitigate risks associated with a single provider.
- Growth potential– BlackRock acknowledges the potential for growth within the Bitcoin market. By incorporating Bitcoin ETFs, BlackRock positions itself to capitalize on this potential and offer its clients access to this asset class.
- Client focus- The rising demand for Bitcoin exposure demands innovative investment solutions, and BlackRock is actively responding to this trend.
SEC Approval and Future Developments
BlackRock’s filings with the SEC for MALOX and BSIIX are currently under review. The SEC’s decision will determine whether these funds can incorporate spot Bitcoin ETFs into their investment strategies.
Regardless of the immediate outcome, BlackRock’s actions send a clear signal about the growing institutional acceptance of Bitcoin, and we can expect further developments in the realm of Bitcoin ETFs and other cryptocurrency investment vehicles.
