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

As of March 1, BSIIX had a total fund size of $36.5 billion, with $24.2 billion in total net assets for its share class. The fund generally invests in fixed-income securities and other market sectors under certain conditions.

Bitcoin inclusion

Adding spot Bitcoin ETFs to the fund's portfolio is expected to enhance its appeal and performance by offering a modern investment option alongside traditional assets.

The March 4 filing indicates that BlackRock plans to acquire shares in exchange-traded products (ETPs) that closely mirror Bitcoin's price by directly holding the digital asset. This includes potentially acquiring shares from a Bitcoin ETP sponsored by BlackRock, such as the iShares Bitcoin Trust (IBIT), and other recently approved spot Bitcoin ETFs.

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 strategy to include Bitcoin ETPs in its portfolio signifies the financial sector’s growing interest in cryptocurrencies. This move reflects a broader trend of traditional investment firms cautiously engaging with digital assets, balancing their potential against associated regulatory and market risks.

Recent reports show that traditional financial institutions, such as Bank of America and Wells Fargo, are beginning to soften their stance on Bitcoin and are considering allowing clients to gain exposure to the cryptocurrency through newly launched ETFs.

The prospectus also notes that ETP expenses may be passed on to shareholders as fees unless waived.

Record-breaking performance

This development follows the success of IBIT, which has become a top market performer since its launch, now managing $10 billion in assets. The ETF’s strong performance has led to a surge in Bitcoin ETF trading volume, reaching $5.4 billion on March 4, the second-highest daily volume since its inception, signaling rising institutional demand for Bitcoin.

This milestone is significant given the volatility and uncertainty of the crypto markets, indicating a growing investor consensus that Bitcoin, and by extension IBIT, is a viable and profitable part of a diversified portfolio. IBIT's success is also bolstered by BlackRock’s reputation as a global asset management leader, attracting investors through its proven track record of strong returns and proactive regulatory compliance, providing a secure investment environment.