Why BlackRock Funds Are Investing Millions Into Its Spot Bitcoin ETF (IBIT)?

Two BlackRock funds have been aggressively buying shares of the iShares Bitcoin Trust ETF (IBIT) pouring a total of $78 million during the last quarter ending September 30. The world’s largest asset manager is itself contributing to the growth of Bitcoin ETF IBIT which has clocked more than $31.6 billion in net inflows.

BlackRock Funds Boost Bitcoin Exposure with IBIT Investments

During the third quarter ending September 30, 2024, two BlackRock funds significantly significantly increased their holdings by buying millions of shares of the Bitcoin ETF.

The BlackRock Strategic Income Opportunities Fund (BSIIX), managing $39 billion in assets, added 2 million shares of IBIT in the quarter ending September 30. This brings its total IBIT holdings to 2,140,095 shares, valued at approximately $118 million.

Similarly, the BlackRock Strategic Global Bond Fund (MAWIX), which oversees $816 million in assets, acquired 24,000 shares of IBIT, increasing its holdings to 40,682 shares, now worth around $2 million.

Rick Rieder, BlackRock’s Chief Investment Officer for Global Fixed Income, is managing both these funds signaling a broader strategy of incorporating cryptocurrency-related assets into traditional portfolios.

In the fourth quarter so far, the IBIT share price has surged by a staggering 61%. On Wednesday, November 27, the IBIT share price closed 6.44% up closing at $55.03. Its gains since inception in January 2024 stand at a staggering 106%.

Bitcoin ETF IBIT Sees Strong Institutional Interest

However, Bitcoin ETF IBIT has been the preferred choice of a diverse group of investors such as institutional investors, hedge funds, and pension funds. These players have contributed to a staggering $31.6 billion in inflows with assets under management now crossing $48 billion amid the Bitcoin price rally to $100K.

According to the latest 13F filings, Millennium Management has emerged as the largest holder of IBIT shares, with investments totaling approximately $848 million. It is followed by Goldman Sachs, holding $461 million, and Capula Management, with $308 million in IBIT shares.

These filings highlight growing institutional interest in IBIT, signaling confidence in cryptocurrency-linked investments. Last week, the Bitcoin ETF options also debuted on Nasdaq, with IBIT options clocking record trading volumes.

Additionally, Bitcoin ETF IBIT has outperformed its peers by a great margin. For e.g. IBIT’s immediate competitor Fidelity FBTChas recorded nearly one-third of inflows above $10 billion, in comparison to IBIT’s $31 billion, per the Farside Investors data.

However, in the last two days, the inflows have dried up with BlackRock’s IBIT recording zero inflows for two consecutive days as the BTC price faces rejection at $100K levels. As of press time, the BTC price is trading 1.42% up at $96,358 with a market cap of over $1.906 billion.