Who is buying a Bitcoin spot ETF?

Reporter: Wu Tianyi

Produced by: DeThings

On May 7, according to The Block, Monolith Management, an investment company owned by former Sequoia China partner Cao Xi, revealed in a filing that it has more than $24 million in BlackRock spot Bitcoin ETFs. (ticker: IBIT), the Hong Kong-based company's position in the BlackRock ETF not only ranks fifth, but is more than double its investment in Meta stock. Additionally, the company's two largest investments are Nvidia and Microsoft.

Currently, asset management institutions in the United States, Hong Kong, Europe and other places have entered the Bitcoin ETF market.

According to watcher.guru, a Hong Kong-based asset management firm purchased a US spot Bitcoin ETF worth $112 million. Specifically, the data shows that Evergreen Asset Management purchased $38 million worth of BlackRock’s iShares Bitcoin Trust (IBIT).

Filings from Ovata Capital Management, also based in Hong Kong, show that its investments in four other spot Bitcoin ETFs are worth more than $74 million.

Documents show that Evergreen Asset Management and Ovata Capital Management have made high-profile investments in U.S. Bitcoin ETFs. The former purchased $38 million worth of IBIT from BlackRock. That represents 12% of its holdings, according to undisclosed filings.

Separately, Ovata holds four spot Bitcoin ETFs worth $74 million. Additionally, the four investment products are from issuers Fidelity, Grayscale, Bitwise and BlackRock.

Another Hong Kong-based fund, IvyRock Asset Management, also reported holding nearly $19 million in BlackRock’s spot Bitcoin ETF on Tuesday.

It is worth mentioning that the time when these Hong Kong companies invested in the U.S. Bitcoin ETF was after the Hong Kong Virtual Asset ETF was approved.

Not only that, Europe’s “Old Money” has begun to appear in Bitcoin ETF transactions.

According to CryptoSlate, French banking giant BNP Paribas revealed that it has begun buying shares of BlackRock iShares Bitcoin Trust (IBIT) and currently holds a small amount of Bitcoin exposure through ETFs. The bank is Europe's second-largest bank by assets and, as of 2022, the ninth-largest bank in the world.

The company’s latest 13F filing, dated May 1, shows the bank held 1,030 shares of IBIT stock, which valued the shares at $41,684.

BNP Paribas’ IBIT investment represents only a small portion of its total investment, which the latest filing reported was $113.8 billion.

In the United States, according to CryptoSlate, the quantitative trading company Susquehanna International Group is one of the largest companies investing in spot Bitcoin ETFs today, and so far holds a total of US$1.3 billion in Bitcoin ETFs. The firm describes itself as one of the world's largest proprietary trading firms, with estimated assets under management (AUM) of $481 billion.

Its investment in spot Bitcoin ETFs was disclosed in documents submitted to the SEC, including holding 17.3 million shares of Grayscale's GBTC through three independent investments, with a total investment of US$1.1 billion. Susquehanna also purchased 1.3 million shares of Fidelity FBTC valued at $83.7 million, 583,049 shares of BlackRock IBIT valued at $23.6 million, 560,832 shares of Bitwise BITB valued at $21.7 million, and 508,824 shares of Ark 21Shares ARKB valued at $36.1 million. It also purchased 256,354 shares of VanEck HODL, valued at $20.6 million, 255,814 shares of WisdomTree BTCW, valued at $19.3 million, 166,200 shares of Invesco BTCO, valued at $11.8 million, and 192,391 shares of Valkyrie BRRR, valued at $3.9 million. These combined investments represent just a fraction of the $575.9 billion in total investments reported in the company's latest 13F.

Hightower Advisors and SouthState Bank, BNP Paribas and Burkett Financial Services reported similar spot Bitcoin ETF investments in their 13F filings. Legacy Wealth Asset Management and multiple other firms also reported investments.

Eric Balchunas, senior ETF analyst at Bloomberg, said that institutional investors have been buying Bitcoin ETFs, with Legacy Wealth Asset Management and United Capital Management of Kansas Inc. investing in the Fidelity Wise Origin Bitcoin Fund (FBTC) Just over $20 million, accounting for 6% and 5% of their portfolio respectively.

Members of BlackRock and Bitwise predict that institutions will continue to invest in spot Bitcoin ETFs, a trend supported by the latest disclosures.

This quarter's 13F filings only disclosed purchases through March 31, which means more recent purchases may still remain undisclosed.

In addition, CNBC said that the highly active market around these funds may indicate that retail traders are using ETFs to participate in the rise of Bitcoin, and the large intraday trading volume indicates that retail traders are a sizable group buying and selling funds.

Including pensions, endowments, sovereign wealth funds, insurance companies, asset managers and family offices, Robert Mitchnick, BlackRock’s head of digital assets, said in a statement to Coindesk on May 2. of financial institutions may start investing in spot Bitcoin ETFs.

But there are also some institutions that are not interested in Bitcoin ETFs. According to CoinDesk, Vanguard Group, one of the world's largest asset management companies, will not allow customers to purchase newly approved Bitcoin ETFs. "The spot Bitcoin ETF will not be available for purchase on the Vanguard platform, and there are no plans to offer the Vanguard Bitcoin ETF or other crypto-related products." A Vanguard spokesperson said the reason behind this decision is that cryptocurrency-related products are not as relevant to asset managers as " Constructing a Balanced Long-Term Portfolio” asset class focus is inconsistent.

Spot Bitcoin ETFs had $52 billion in assets under management as of May 7, with $11.7 billion in inflows as of May 6.

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