The largest asset management company in the world, BlackRock, has filed to add Bitcoin Exchange Traded Funds (ETFs) to its Global Allocation Fund with the US Securities and Exchange Commission (SEC). This action highlights BlackRock’s major shift in favour of integrating Bitcoin, indicating a wider acceptance of the cryptocurrency in traditional financial portfolios.
Fund for Global Allocation to Incorporate Bitcoin
To replicate the performance of the cryptocurrency market, BlackRock intends to invest in Bitcoin ETFs that hold actual Bitcoin.
According to the paper, “The Fund may purchase shares of exchange-traded products (‘ETPs’) that aim to directly hold Bitcoin to generally reflect the performance of the price of Bitcoin, including shares of a Bitcoin ETP sponsored by a BlackRock affiliate.” It also clarifies that investments in Bitcoin ETPs will only be permitted for those listed and traded on reputable national securities exchanges.
This calculated move fits into BlackRock’s overall investment plan for its Global Allocation Fund. This mutual fund aims to give investors worldwide diversification by investing in various assets, such as bonds, stocks, and now, possibly, Bitcoin exchange-traded products. As of March 7, the Fund, with $17.8 billion in assets under management (AUM) and a 4.61% year-to-date (YTD) return, aims to manage risk and produce long-term capital growth and income while taking advantage of global investment opportunities.
MacroScope said, “A new filing by BlackRock late this afternoon,” in response to comments made by cryptocurrency analysts over the significance of BlackRock’s action. As I’ve stated, Wall Street firms will use a lot of money for their internal investment funds in the upcoming months. This opinion aligns with the growing belief that significant institutional investors will soon enter the market, which might lead to increased demand and acceptance.
BlackRock Increases Its Bitcoin Bet
This application aligns with BlackRock’s prior one, which sought to buy spot Bitcoin ETFs for its Strategic Income Opportunities Fund. This suggests that the asset manager has a more comprehensive plan to include Bitcoin in the broader range of financial products. BlackRock’s entry into spot BTC ETFs may position its funds to profit on the digital asset’s potential for high returns as long as the market for bitcoin remains strong.
Interestingly, with an AUM of $36.7 billion, the Strategic Income Opportunities Fund is twice as large as the Global Allocation Fund. Nonetheless, the fund has underperformed this year, gaining just 0.59% year to date.
The SEC has not yet responded to BlackRock’s demands, though. Both files still require commission chairman Gary Gensler’s approval. Nevertheless, BlackRock’s move to include Bitcoin in its funds is a positive indication that could lead other asset managers to investigate Bitcoin as a potential addition to their varied investment funds.
Bitcoin was trading at $67,176 at the time of publication.
