BlackRock looking to include Bitcoin exposure in other funds

BlackRock has filed an amendment with the SEC to integrate Bitcoin exposure in its Strategic Income Opportunities Fund (BSIIX), according to a March 4 filing.

BSIIX’s total fund size stood at $36.5 billion, while its share class total net assets were $24.2 billion as of March 1. The fund typically invests in fixed-income securities and other market sectors under certain conditions.

Bitcoin exposure

The inclusion of spot Bitcoin ETFs in the fund’s portfolio is expected to bolster its appeal and performance, offering a contemporary investment avenue alongside traditional assets.

According to the filing dated March 4, BlackRock intends to procure shares in exchange-traded products (ETPs) that closely track the performance of Bitcoin’s price by directly holding the digital asset.

This includes the potential acquisition of shares from a Bitcoin ETP sponsored by a BlackRock affiliate — like its in-house iShares Bitcoin Trust (IBIT) — and other spot Bitcoin ETFs that were recently approved.

The filing states:

“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.”

BlackRock’s approach to incorporating Bitcoin ETPs into its portfolio is indicative of the financial sector’s increasing willingness to explore the potential of cryptocurrencies.

The initiative reflects a broader trend of traditional investment firms cautiously engaging with digital assets, balancing the innovative prospects of crypto investment against the regulatory and market risks associated with these assets.

Recent reports confirmed that traditional financial institutions — including Bank of America and Wells Fargo — are starting to soften their stance toward Bitcoin and is now considering allowing clients to gain exposure to the flagship crypto through the newly launched ETFs.

The prospectus also describes how ETP expenses can be passed on to shareholders in the form of fees, unless waived.

Record-breaking performance

The development follows the record-setting success of IBIT, which has emerged as the market’s top performer since its launch. The fund now holds $10 billion in assets under management.

The ETF’s remarkable performance has fueled a significant uptick in the trading volume of Bitcoin ETFs, with a staggering $5.4 billion in trades on March 4. This figure marks the second-highest daily trading volume since the ETF’s inception and is another sign of rising institutional demand for Bitcoin.

This milestone is particularly significant, considering the overall volatility and uncertainty that often characterize the crypto markets. It reflects a growing consensus among investors that Bitcoin, and by extension IBIT, represents a viable and lucrative component of a diversified investment portfolio.

The ETF’s success has also been buoyed by BlackRock’s reputation as a global leader in asset management. Investors are drawn to IBIT because of the trust and credibility associated with the BlackRock brand, which has a proven track record of delivering strong returns across its investment products.

This trust is further reinforced by BlackRock’s proactive approach to compliance and regulatory oversight, ensuring that IBIT operates within the frameworks established by financial regulators, thereby offering investors a secure investment environment.