BlackRock, the world’s largest asset manager, has revealed that it holds 16,361 bitcoins worth over $707 million as of December 31, 2023. The company disclosed this information in its latest filing with the Securities and Exchange Commission (SEC) for its spot Bitcoin exchange-traded fund (ETF).
The spot Bitcoin ETF, which trades under the ticker BTCX on the Toronto Stock Exchange (TSX), was launched by BlackRock in partnership with Purpose Investments in October 2023. It is the first ETF in North America that directly invests in physical bitcoins rather than futures contracts or other derivatives.
According to the filing, BlackRock owns 16,361.01 bitcoins with a fair value of $707,092,000 as of December 31, 2023. This represents about 98.6% of the total net assets of the ETF, which amounted to $716,883,000 at the end of last year. The remaining 1.4% of the net assets consisted of cash and other receivables.
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The spot Bitcoin ETF has seen strong demand from investors since its inception. As of January 17, 2024, it had 17,361,010 units outstanding, with a net asset value per unit of $41.25. The ETF has a management fee of 1% and an expense ratio of 1.03%.
BlackRock’s involvement in the Bitcoin space is significant because it is one of the most influential and respected financial institutions in the world. It manages over $9.5 trillion in assets for clients across various sectors and regions. Its endorsement of Bitcoin as a legitimate investment vehicle could boost the adoption and acceptance of the cryptocurrency among institutional and retail investors alike.
BlackRock is not the only major asset manager that has exposure to Bitcoin through ETFs. In November 2023, Fidelity Investments launched its own spot Bitcoin ETF in Canada, which trades under the ticker FBTC on the TSX. Fidelity also filed for a Bitcoin futures ETF in the US, but it is still awaiting approval from the SEC.
The SEC has so far approved only Bitcoin futures ETFs in the US, which do not hold actual bitcoins but rather track the price movements of Bitcoin futures contracts traded on regulated exchanges. There are currently five such ETFs available in the US market: ProShares Bitcoin Strategy ETF (BITO), Valkyrie Bitcoin Strategy ETF (BTF), VanEck Bitcoin Strategy ETF (XBTF), Invesco Bitcoin Strategy ETF (BTCF), and Simplify Volatility Premium Bitcoin ETF (SPBC).
However, many investors and experts prefer spot Bitcoin ETFs over futures ETFs because they offer lower fees, lower tracking errors, and higher exposure to the underlying asset. Spot Bitcoin ETFs also avoid the risks and complexities associated with rolling over futures contracts every month.
ARK Invest, the investment management firm led by Cathie Wood, has purchased $15.9 million worth of shares in its own spot Bitcoin ETF, ARK 21Shares Bitcoin ETF (ARKB). The ETF, which launched on January 13, 2024, is the first of its kind in the US to offer exposure to the actual Bitcoin cryptocurrency, rather than futures contracts or other derivatives.
ARK Invest is known for its bullish outlook on disruptive technologies, such as artificial intelligence, biotechnology, and blockchain. The firm has been a vocal supporter of Bitcoin and has invested in several companies related to the crypto industry, such as Coinbase, Square, and Grayscale.
By buying shares in its own Bitcoin ETF, ARK Invest is signaling its confidence in the long-term potential of the digital asset and its commitment to providing investors with innovative and accessible products. The ARKB ETF tracks the performance of the 21Shares Bitcoin USD Price Index, which uses data from multiple exchanges to calculate the spot price of Bitcoin.
The ETF charges a 0.95% expense ratio and holds Bitcoin in cold storage with Coinbase Custody as the custodian. The ETF aims to offer investors a convenient and secure way to gain exposure to Bitcoin without having to deal with the technical challenges of buying and storing the cryptocurrency themselves. ARK Invest is not the only firm that has launched a spot Bitcoin ETF in the US.
VanEck, Valkyrie, and ProShares have also received approval from the Securities and Exchange Commission (SEC) to offer similar products. However, ARK Invest is the first to invest in its own ETF, demonstrating its conviction in the value proposition of Bitcoin as a store of value, a medium of exchange, and a hedge against inflation.