BlackRock, the world’s largest asset management firm, has submitted a filing to the US Securities and Exchange Commission (SEC) to include Bitcoin Exchange Traded Funds (ETFs) in its Global Allocation Fund. This move underscores a significant pivot of BlackRock towards the integration of BTC, reflecting a broader acceptance of the cryptocurrency within mainstream investment portfolios.
Global Allocation Fund To Include Bitcoin
According to the filing, BlackRock aims to invest in Bitcoin ETFs that directly hold BTC, with the objective of mirroring the cryptocurrency’s market performance.
The document 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.” Furthermore, it clarifies that any Bitcoin ETP investments will be limited to those listed and traded on recognized national securities exchanges.
This strategic initiative is part of BlackRock’s broader investment strategy for its Global Allocation Fund, a mutual fund with a mandate to provide investors with global diversification through investments in a wide array of assets, including equities, bonds, and now, potentially, Bitcoin ETPs. The Fund, which holds $17.8 billion in assets under management (AUM) and has achieved a 4.61% year-to-date (ytd) return as of March 7, seeks to capitalize on global investment opportunities while managing risk and aiming for long-term capital growth and income.
Crypto analysts have commented on the significance of BlackRock’s move, with MacroScope stating, “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 the entry of major institutional investors into the space is imminent, potentially driving further demand and adoption.
BlackRock Doubles Down On BTC
This filing follows a previous application by BlackRock to purchase spot Bitcoin ETFs for its Strategic Income Opportunities Fund, indicating a broader strategy by the asset manager to incorporate BTC into its diverse range of investment products. With the BTC market continuing to show strength, BlackRock’s foray into spot BTC ETFs could position its funds to benefit from the digital asset’s potential for high returns.
Notably, the Strategic Income Opportunities Fund is double the size of the Global Allocation Fund, with an AUM of $36.7 billion. However, the fund is showing a rather underperformance this year, with a slight 0.59% gain ytd.
However, the SEC’s decision on BlackRock’s requests remains pending. The commission under chairman Gary Gensler still needs to approve both filings. Despite that, BlackRock’s initiative to integrate BTC into its funds is an extremely bullish sign that may pave the way for other asset managers to explore Bitcoin as a viable component of their diversified investment funds.
At press time, BTC traded at $67,176.
Featured image from The Trade, chart from TradingView.com