(Kitco News) – It has now been more than four months since multiple spot Bitcoin (BTC) exchange-traded funds (ETFs) launched on the U.S. market, and the data shows demand has been high and is likely to increase moving forward as large institutions are increasingly starting to make allocations.
According to a 13F filing by the Bank of Montreal (BMO), one of Canada’s largest financial institutions and part of the country’s “Big Five,” the bank has exposure to four of the listed ETFs including Fidelity’s FBTC, Frankin Templeton’s AZBC, BlackRock’s IBIT, and Grayscale’s GBTC.
? BREAKING: ?? Bank of Montreal has #Bitcoin ETF exposure, per 13F SEC filings today.
One of Canada's Big 5 Banks, with CAD $1.3T in assets! ? pic.twitter.com/ec9NMj0jTX— Julian Fahrer (@Julian__Fahrer) May 13, 2024
And BMO is not alone as Fahrer reported that Canadian Imperial Bank of Commerce (CIBC) also has exposure to several Bitcoin ETFs to the tune of $7.2 million.
“The fact that two prominent Canadian banks have made their Bitcoin ETF investments public suggests growing institutional interest in cryptocurrencies, particularly Bitcoin,” said crypto analyst The Dogefather. “This development could be seen as a positive sign for the cryptocurrency market, as it indicates a level of acceptance and confidence from traditional financial institutions.”
“However, it is also important to note that the exposure of these banks to Bitcoin ETFs is relatively small compared to their overall assets,” he added. “The $7.2 million investment by CIBC represents a tiny fraction of its total assets, which are in the billions of dollars. This suggests that while these banks are exploring the potential of Bitcoin and other cryptocurrencies, they are doing so cautiously and are not yet making substantial investments in the space.”
And it's not just Canadian banks that have started to gain exposure to Bitcoin via the U.S. ETFs as a 13F filing from the State of Wisconsin’s investment board, which manages the Wisconsin Retirement System and the State Investment Funds alongside some smaller funds, shows the agency bought $99 million, or roughly 2.4 million shares, of IBIT, along with gaining some exposure to GBTC.
“This is a small part of a massive public investment fund (total value of all positions in the 13F filing is $37.8 billion). But the long-term importance cannot be overstated,” said market analyst MacroScope. “Wisconsin is now the second-largest reporting holder of IBIT globally. This will be closely analyzed and widely discussed by other state investment boards. Watch for others to follow in coming quarters.”
Dave Weisberger, Chair of CoinRoutes, also sees this as the start of a larger trend.
“The most notable thing about the State of Wisconsin investing 0.1% of their AUM into Bitcoin is how fast their diligence process was,” he tweeted. “NOTE, however, that it is likely just a start and it is a signal that many pension funds will do the same thing. The AUM of state and local pension funds is roughly $6 trillion, so the establishment of 1-3% positions will require much higher prices considering the size of the Bitcoin market.”
Over the past several weeks, multiple institutional firms have revealed allocations to spot BTC ETFs in a trend that looks to be gaining momentum over time. Other allocators include Bracebridge Capital, a US-based hedge fund with $12 billion in AUM, which has reported holding $262 million of ARK Invests ARKB, $81 million of IBIT, and $20 million worth of GBTC.
According to Bloomberg Intelligence Senior ETF analyst Eric Balchunas, Bracebridge Capital is now the largest owner of both Ark Invest and BlackRock's spot Bitcoin ETFs.
The new high water mark (ex APs/market makers) for bitcoin ETF holdings has arrived. Boston-based Bracebridge Capital has reported owning $262m of $ARKB. It's also the biggest owner of $IBIT too with $81m in that ETF. They also own $20m of $GBTC. They went wild basically. pic.twitter.com/RzdpwE2D0k
— Eric Balchunas (@EricBalchunas) May 13, 2024
“What is also notable IMO is the sheer number of holders that each has so far… $IBIT is up to 250,” Balchunas said in a follow-up tweet. “That's bonkers for first quarter on [market].”
On Monday, a 13F filing from Swiss bank UBS, the country’s largest banking institution and the largest private bank in the world, showed the firm holds at least 3,600 shares of IBIT, which were purchased for around $40.50 per share.
Previous reports have shown that BNP Paribas holds roughly 1,000 shares of IBIT, while BNY Mellon holds 20,000 shares, along with 7,000 shares of GBTC.
Quattro Advisors, a Pittsburgh-based registered investment manager, has disclosed holding 468,000 shares of IBIT, while Wolverine Asset Management holds 874,188 shares of FBTC.
Pennsylvania-based Envestnet has opted to spread their exposure across multiple BTC ETFs and currently holds 682,000 shares of FBTC, 168,000 shares of GBTC, 57,500 shares of ARKB, 76,000 shares of IBIT, and 50,600 shares of Bitwise’s BITB.
Wells Fargo and JPMorgan have also disclosed exposure to Bitcoin via the ETFs in recent weeks but have less than $1 million in combined exposure. And Susquehanna International Group, a leader in quantitative trading, has emerged as one of the biggest institutional Bitcoin whales, allocating $831 million across the ten ETFs.
