BlackRock Income and Bond Funds to Invest in Own Bitcoin ETF

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In a significant move highlighting the increasing institutional interest in cryptocurrency, the BlackRock income and bond-focused funds have purchased shares of the asset manager’s own spot Bitcoin exchange-traded fund (ETF). 

Regulatory filings reveal that BlackRock’s Strategic Income Opportunities Fund (BSIIX) and Strategic Global Bond Fund (MAWIX) made substantial investments in the first quarter of 2024.

BlackRock Fund Acquires Own ETF

The filings, dated May 28, show that the BSIIX fund acquired $3.56 million worth of shares in the iShares Bitcoin Trust (IBIT), while the MAWIX fund purchased $485,000 worth. Despite these investments, the IBIT shares represent a small fraction of the funds’ total investment portfolios, which are valued at $37.4 billion and $776.4 million, respectively.

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As of May 24, BlackRock data indicates that the IBIT holds approximately $19.61 billion worth of Bitcoin. This makes it one of the largest Bitcoin funds globally, trailing only the Grayscale Bitcoin Trust (GBTC), which holds $19.76 billion according to Grayscale data from May 28.

Spot Bitcoin ETFs Hold Over 1M BTC

Spot Bitcoin ETFs worldwide now collectively hold over 1 million Bitcoin, valued at more than $68 billion. This represents nearly 5.10% of Bitcoin’s total circulating supply of 19.7 million BTC, according to CoinGecko.

The trend of institutional investment in Bitcoin ETFs is not limited to BlackRock. Recent SEC filings reveal that over 600 U.S. investment firms have purchased spot Bitcoin ETFs since their launch in January. 

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Notable firms include Morgan Stanley, JPMorgan, Wells Fargo, Royal Bank of Canada, BNP Paribas, UBS, and several hedge funds such as Millennium Management and Schonfeld Strategic Advisors.

Millennium Management stands out as the largest accumulator of spot Bitcoin ETFs, with a total investment of $1.9 billion. This includes $844.2 million invested in IBIT and $806.7 million in the Fidelity Wise Origin Bitcoin Fund (FBTC).

BlackRock and Its Bid on BTC

On May 23, BlackRock was among eight firms to receive approval for their spot Ether (ETH) ETF bids in the United States. However, the SEC must still approve the firms’ Form S-1 filings before these products can start trading.

The substantial investments by major financial institutions reflect growing confidence in cryptocurrency as a viable investment asset. The influx of institutional funds into Bitcoin ETFs marks a significant shift in the financial landscape, suggesting that digital assets are becoming an integral part of diversified investment portfolios.

Growing Interest in Bitcoin

BlackRock’s strategic move to invest in its own Bitcoin ETF through its income and bond-focused funds indicates a broader acceptance and validation of Bitcoin within traditional financial institutions. 

This trend is further evidenced by the wide range of other investment firms also purchasing spot Bitcoin ETFs, highlighting the increasing demand for regulated cryptocurrency investment vehicles.

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