A new quarterly 13F report revealed that the world's largest companies are investing large sums of money in Bitcoin ETFs. What does this mean for the crypto industry?
Several hundred US firms have filed Form 13F with the Securities and Exchange Commission (SEC). What is very interesting about the crypto market is that many institutional investors own shares of Bitcoin ETFs.
How Form 13F works
13Fs are quarterly reports filed with the SEC by managers of investment institutions with at least $100 million under management. 13Fs provide information on stock ownership at the end of each quarter.
One requirement of the US regulator is periodic reporting of financial activities and positions. Large investment companies, such as funds, managers, trust companies, and other firms, must provide this report.
This is done to control the visibility of the market – large funds with a large number of transactions can change quotes in the desired direction. If the SEC detects collusion or an attempt to use quotes illegally, proceedings will follow.
The report contains the following data:
- List of securities held by the fund. Names of issuers are listed in alphabetical order;
- Paper grade. For example, common or preferred shares, put/call options, etc;
- Number of securities held;
- Market value at the end of the calendar quarter.
However, the main disadvantage of this form is the reliability of the information. The investor submits information once a quarter, showing the composition of the portfolio at the end of the reporting period.
Short-term activities performed within a quarter are different from the form. In addition, no one ensures that the report is completed correctly, so the SEC cannot verify its information.
What is interesting about 13F in the crypto industry?
The approval of spo Bitcoin ETFs in January opened up new opportunities to invest in “digital gold.” Investors can monitor its price movements without having BTC itself in their hands.
Instead of dealing with crypto exchanges and wallets separately, an investor can buy Bitcoin ETF shares through regular accounts. The Bitcoin spot ETF has worked to increase the adoption of Bitcoin and increase its currency. This view is clearly confirmed in the latest 13F report.
In total, the 13F filing confirmed investments by 937 large corporate investors in Bitcoin ETFs. Gold exchange-traded funds were not very popular: 95 companies were linked to the precious metal as of March 31.
“Retailers own most of the float. Professional investors held $11.06bn of exposure at the end of Q1, representing 18.7% of BTC ETF AUM.”
Vetle Lunde, Senior Analyst at K33 Research
Millennium is the largest shareholder of the Bitcoin ETF, with $1.9 billion on the hedge fund's balance sheet. Based on the first quarter of 2024 results, the State of Wisconsin Investment Board (SWIB) invested $162.7 million in exchange-traded securities.
Morgan Stanley owns $269.9 million in Greyscale's GBTC exchange-traded fund. Thus, the bank ranks third among institutions in terms of the volume of these securities on its balance sheet.
In addition, the financial giant acquired $2.3 million worth of ARKB fund shares from ARK Invest. The bank is among the top 20 owners of ARKB among institutions.
JPMorgan Chase had five Bitcoin ETF positions. The banking giant invested in iShares Bitcoin Trust, Grayscale Bitcoin Trust, ProShares Bitcoin Strategy ETF, Fidelity Wise Origin Bitcoin Fund, and Bitwise Bitcoin ETF, for a total of $760,000 in Bitcoin ETFs.
Is Bitcoin the asset of the future for institutional investors?
Only long positions in US stocks and stock options should be disclosed in 13F filings. Accordingly, the documents do not require the disclosure of information about short positions, that is, the shorting of certain assets, which means that they provide only a partial picture of the overall strategy of the chosen giant.
In addition, even a private view of companies' investments sheds light on their interest in a particular product. The fact that almost ten times more companies are interested in Bitcoin ETFs compared to gold suggests that the time has come for a new era of Bitcoin.
The green road of the crypto market
Institutions invested $3.5 billion in Bitcoin ETFs, accounting for 29% of total inflows. The investment of the world's largest companies in Bitcoin ETFs is the main gain this year. Nevertheless, such actions indicate the transformation of BTC into a recognized asset class that is in demand among high-end investors.
Bitcoin's rise has been accompanied by an increase in funds in existing ETFs and the release of 13F filings. Analyst platform Santiment recorded a total of $5.65 billion on May 16, the best figure since March 24. Analysts are keenly aware that the days when whales were only pet owners are gone.
Bloomberg senior analyst Eric Balchunas also notes the success of the BlackRock IBIT fund in one of the most important metrics of exchange-traded funds.
In the first quarter, 414 institutional investors invested in IBIT of BlackRock alone, and Balchunas traditionally calls 20 such owners as a good indicator of the first quarter of the fund.
What's next?
The publication of the 13F report caused a temporary increase in the rate of the first cryptocurrency last week. However, the overall trend in the long term also looks positive – institutional interest in Bitcoin products is evident, which means there is an opportunity for capital growth in the Bitcoin ETF sector.
