BlackRock Inc. (BLK) has added the iShares Bitcoin Trust (IBIT), its spot bitcoin ETF, to two of its model portfolios, the company confirmed to etf.com Friday.
IBIT—the largest of the spot bitcoin ETFs with $48.3 billion in assets—was added to the Target Allocation with Alternatives and the Target Allocation with Alternatives Tax-Aware portfolios, a company spokesperson said.
In a note, Michael Gates, lead portfolio manager for BlackRock’s Target Allocation ETF model portfolio suite wrote: “In portfolios that hold alternatives, we are adding a position in Bitcoin, funded from equities as an additional alternative asset with a fixed supply, with a potentially diversifying source of risk and return.”
Though BlackRock’s model portfolio universe represents some $150 billion, the company explained that IBIT’s addition is only an extremely small slice.
“The addition of IBIT to these portfolios as a diversifier are in line with the investment objectives of this model, as Target Allocation with Alts portfolios are designed for investors with a higher risk budget and growth target,” a BlackRock spokesperson said to etf.com. New York-based BlackRock is the world’s biggest exchange-traded fund issuer, managing more than $3 trillion in 438 ETFs.
Adding IBIT to the model portfolios allows investors more opportunities to access cryptocurrency. Still, the move comes as spot bitcoin ETFS have been hit by record outflows amid a slump in the price of the largest cryptocurrency. Bitcoin has fallen to less than $84,000, a 90-day low.
“We believe bitcoin has long-term investment merit and can potentially provide unique and additive sources of diversification to portfolios,” Gates wrote in his note.
Nearly $3 billion has flowed from spot bitcoin ETFs over the past week, with more than $700 million leaving IBIT this week alone, according to etf.com data. The outflows are the most that spot bitcoin has seen since they launched in January of last year.
Despite the record high outflows, IBIT still remains the largest spot bitcoin ETF. The fund has raked in more than $37 billion since its launch, more than triple the inflows of the next largest spot bitcoin ETF, FBTC, the Fidelity Wise Origin Bitcoin Fund.
