Bitcoin spot ETF

BlackRock to allocate up to 2% of model portfolio to IBIT Bitcoin ETF

Published

2 weeks ago

February 28, 2025

BlackRock, the world’s largest asset manager with over $10 trillion in assets under management, is incorporating Bitcoin into its own model portfolio.

According to a Bloomberg report on Feb. 28, the asset manager will allocate 1% to 2% of its Bitcoin (BTC) exchange-traded fund to target model investment portfolios. These allocations, sourced from the BlackRock iShares Bitcoin Trust ETF under the ticker IBIT, will be directed toward the company’s portfolios that include alternative investments.

In the investment world, model portfolios are pre-structured funds designed to offer ready-made strategies. They provide managed investment strategies that invest in fund shares and are marketed to financial advisors.

Model portfolios have seen significant growth across the market, driven in part by rising interest in digital assets and crypto exchange-traded products.

BlackRock’s IBIT is currently a $48 billion spot Bitcoin ETF, holding 576,046 bitcoins, which accounts for about 2.9% of the total Bitcoin market share. According to Bloomberg, BlackRock plans to allocate 1% to 2% of IBIT into its $150 billion model portfolio.

Although this $150 billion pool represents a small portion of BlackRock’s overall model portfolio business, the inclusion of IBIT could significantly boost demand for the spot Bitcoin ETF.

Michael Gates, lead portfolio manager for target allocation ETF models at BlackRock, reiterated the company’s confidence in Bitcoin as an investment.

“We believe Bitcoin has long-term investment merit and can potentially provide unique and additive sources of diversification to portfolios,” Gates said in a note to investors on Feb. 27.

The U.S. Securities and Exchange Commission approved IBIT and several other spot Bitcoin ETFs in January 2024. BlackRock, Fidelity Investments, WisdomTree, and VanEck were among the firms that received regulatory approval for the listing and trading of Bitcoin ETFs.

Investor demand for these funds helped push Bitcoin’s price above $69,000 in March 2024. Later, heightened interest amid the U.S. election cycle propelled Bitcoin to an all-time high above $109,000.

However, a sell-off has since driven BTC down to $79,000, with significant outflows from spot ETFs, including IBIT, in the past week.

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Bitcoin spot ETF

We Need In-Kind Redemptions For The Spot Bitcoin ETFs

Published

3 months ago

December 21, 2024

admin

On a recent episode of the Coinage podcast, guest SEC Commissioner Hester Peirce said that she is open to reconsidering in-kind redemptions for spot bitcoin ETFs.

(For those who aren’t familiar with the term “in-kind redemption,” it refers to the ability to withdraw the bitcoin you’ve purchased via an ETF into your own custody. In essence, it turns a bitcoin IOU into the real thing.)

BREAKING: SEC Commissioner Hester Peirce previews new pro-crypto changes coming to the SEC
ETF in-kind redemptions and ability for ETF issuers to begin staking likely done "early on"
Both ETFs now have more than $100B in AUM pic.twitter.com/g3jtbuBeWU
— Coinage (@coinage_media) December 20, 2024

This makes my heart happy, as bitcoin wasn’t designed to exist trapped within the wrappers of the old system. It was built to set us free from that system.

If Peirce can work with the incoming SEC Chair, Paul Atkins, to facilitate the approval of in-kind redemptions then the spot bitcoin ETFs can serve as some of the biggest on-ramps to Bitcoin, as Bitwise co-founder Hong Kim put it, as opposed to simply existing as speculation vehicles.

Bitcoin was born to exist in the wild. It wasn’t born to exist in a Wall Street zoo.

In-kind redemptions would allow the bitcoin currently trapped within the zoo the ability to return to its natural habitat.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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