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Global investment giant BlackRock filed a prospectus with the U.S. Securities and Exchange Commission on Monday that laid out the firm's plan to add new Bitcoin exchange-traded funds to its strategic portfolio. Dubbed the Strategic Income Opportunities Fund, BlackRock will include investments in Bitcoin among its other offerings, highlighting the risks of each.
“The fund may acquire shares in exchange-traded products (ETPs) that seek to reflect generally the performance of the price of Bitcoin by directly holding Bitcoin (Bitcoin ETPs), including shares of a Bitcoin ETP sponsored by an affiliate of BlackRock,” the company wrote.
In January, the SEC approved 11 spot Bitcoin ETFs, allowing all eligible applicants to trade on U.S. exchanges. The new investment product line has proven to be massively popular.
BlackRock noted that the strategic fund would only invest in Bitcoin ETPs that are “listed and traded on national securities exchanges,” adding that the fund may also invest in Bitcoin futures.
BlackRock highlighted that the fund and any Bitcoin ETPs in which it it invests will incur costs like management and advisory fees, but that the firm may choose to waive some of these fees.
The firm cautioned investors about the risk involved with investing, including the lose of all of their money in the investment.
"Risk is inherent in all investing. The value of your investment in the Ffnd, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time," BlackRock said in the filing. "You may lose part or all of your investment in the fund or your investment may not perform as well as other similar investments."
BlackRock included a specific warning on investing in the cryptocurrency market, highlighting a lack of transparency that could lead to difficulties in verifying assets, an increased risk of fraud and manipulation—including Ponzi schemes—and the use of digital assets for illicit activities.
“Such events could negatively impact Bitcoin's price and investment appeal,” the firm said.
Edited by Ryan Ozawa.