As a crypto investor with a few years of experience under my belt, I find BNP Paribas’ recent investment in spot Bitcoin ETFs an intriguing development. While it may seem insignificant compared to their vast AUM, the move signifies a growing interest from traditional financial institutions in the digital currency market.
With a vast AUM of $600 billion, the proposed investment in Bitcoin might appear insignificant. However, this represents a meaningful first move for the firm as they delve into the realm of Bitcoin investing.
In 2022, the bank initiated its exploration into the cryptocurrency realm through a collaboration with Metaco. Their objective was to create a crypto custodial solution enabling the approved digital asset management, including issuance, transfer, and secure preservation, for clients.
After that point, BNP Paribas has deliberately put resources into this sector, helping new businesses thrive in the rapidly expanding digital marketplace.
Last year, I had the privilege of being part of a significant $100 million investment consortium, spearheaded by my bank and Goldman Sachs, for Fnality International. This innovative company focuses on utilizing blockchain technology to facilitate secure and streamlined cash transfers among financial institutions.
Paribas’ latest purchase of spot Bitcoin ETFs comes at a time when there’s been a drop-off in institutional interest in these funds. On Thursday alone, these investment vehicles experienced their largest outflow ever, with $563.7 million being withdrawn since they were launched in January.
Approximately $191 million was withdrawn from Fidelity’s FBTC, making it the frontrunner for the largest outflow. Grayscale’s GBTC followed suit with a significant withdrawal of approximately $167.3 million.
Institutional Debate on Bitcoin ETFs
Discussions have been ramping up in the cryptocurrency world regarding X, as institutional acceptance of Bitcoin ETFs has remained limited. According to Jim Bianco from Bianco Research, this reluctance among institutions stems from a perception that these ETFs are unappealing.
In contrast to Bianco’s perspective, I, Eric Balchunas, senior ETF analyst at Bloomberg, expect a significant uptake of these financial products once investment advisors disclose their holdings in their 13F filings due this month.
Approximately 150 advisors nationwide have disclosed ownership of a spot ETF through their 13F filings, even though most of these reports have yet to be submitted.
“A large number of 13F filings have not been submitted as of now, but over 150 investment advisors from various parts of the country have disclosed owning a position in a spot ETF,” he noted on X.
Approximately 500 institutional advisors are predicted to adopt Bitcoin ETFs by May 15th, according to anticipation.
According to Balchunas’ forecast, the surge of interest from financial advisors could establish new benchmarks for Bitcoin ETF adoption by institutions during the initial quarter of the market, potentially indicating a significant shift in the trend.
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2024-05-02 15:57