Key Notes
- BlackRock's move to include IBIT in its model portfolios responds to advisor demand for crypto exposure within their investment strategies.
- IBIT has dominated the Bitcoin ETF market since January 2024 approval, controlling over 50% of market share with approximately $56.8 billion in Bitcoin.
- The strategic portfolio inclusion comes amid challenging market conditions, with Bitcoin ETFs experiencing $3.2 billion in outflows over eight days and a record single-day withdrawal of $1.14 billion.
Bloomberg reported Friday that BlackRock, the world’s largest asset issuer with $11.5 trillion under management, has expanded its crypto exposure by adding its BlackRock’s iShares Bitcoin Trust (IBIT) into its portfolio strategies that allow alternative investments.
According to the report citing internal documents seen by the traditional news media, BlackRock allocated 1% and 2% of the Bitcoin ETF to the Target Allocation model portfolios, allowing Wall Street traders to explore the fund.
BlackRock Expands Bitcoin Exposure
For clarity, BlackRock’s model portfolios are ready-made investment strategies used by financial advisors. While this Bitcoin allocation is only in a small subset of BlackRock’s $150 billion model-portfolio business, it opens new demand for IBIT.
The fund was among the Bitcoin ETFs approved by the US Securities and Exchange Commission (SEC) in January 2024, following a series of scrutiny. However, IBIT quickly garnered interest among institutional investors, consistently bringing in funds into the crypto market.
The fund competed with Grayscale Investments GBTC with each product fighting to dominate the Bitcoin ETF market. However, thanks to BlackRock’s reputation and broad list of clients, IBIT bested all the other Bitcoin ETFs in terms of performance and adoption.
As of February 21, BlackRock’s IBIT controlled over half of the total Bitcoin ETF market. Data from blockchain analytics firm Dune shows that BlackRock holds about $56.8 billion worth of Bitcoin shares, making up more than 50% of the market share. In comparison, all other Bitcoin ETF issuers combined hold approximately $112 billion in Bitcoin.
Now, BlackRock had added the fund into its strategic portfolios. According to Bloomberg, the move comes in response to market demand. The Eve Cout, head of portfolio design and solutions for US Wealth at BlackRock said that advisors are constantly seeking exposure within the model portfolios.
Bitcoin ETFs Face Heavy Outflows Amid Market Volatility
Meanwhile, BlackRock’s move to include its Bitcoin ETF in model portfolios comes at a time when the crypto ETF market is under pressure, experiencing heavy outflows amid market volatility.
Since last week, Bitcoin ETFs have collectively lost $3.2 billion in just eight days, with only four days of net inflows recorded this month, according to data from SoSoValue. This massive outflows resulted in a monthly net outflow of $3.65 billion.
Tuesday marked a record outflow day for spot Bitcoin ETFs, with $1.14 billion exiting the market. BlackRock’s IBIT saw its biggest single-day outflow of $418 million on Wednesday. However, the latest outflow of $275.8 million on Thursday was more moderate compared to previous days.
nextDisclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
