According to a 13F filing with the US Securities and Exchange Commission (SEC), multinational bank BNP Paribas has acquired shares in BlackRock's iShares Bitcoin Trust (IBIT) fund. This first quarter of 2024, BNP Paribas purchased 1,030 units of IBIT at $40.47 per unit, representing a total of $41,684.10. This is less than the value of a single Bitcoin at current prices.
BNP Paribas, Europe's second largest bank in terms of assets, has allocated a small portion of its investment portfolio to IBIT. Nevertheless, this purchase marks one of the first times that a major financial institution has invested in a Bitcoin spot ETF, partially validating the thesis that institutional investors would be attracted to these exchange-traded funds.
Institutional investment managers with assets of at least $100 million must submit quarterly 13F reports to the SEC. Banks and fund managers have up to 45 days after the end of a quarter to submit their reports, including foreign banks like BNP Paribas that trade in the US.
A Goldman Sachs report published just after the US SEC approved several spot Bitcoin ETFs in January warned that "time to market and demand among institutional investors may not be immediate." Matt Hougan, chief investment officer of cryptocurrency index fund manager Bitwise, backed up this argument, saying that "most professional investors still can't buy Bitcoin ETFs", but he expects this to change thanks to a series of more than 100 individual due diligence processes over the next two years.
Since their launch in January, Bitcoin ETFs have attracted $11.2 billion in net inflows, according to data from Farside Investors, despite more than $17.4 billion in outflows from the Grayscale Bitcoin Trust (GBTC). Bitcoin ETFs have seen steady net outflows in recent days, with more than $563 million in net outflows yesterday alone. These outflows coincided with the US Federal Reserve's decision to keep interest rates unchanged, causing investors to turn away from risky assets such as equities and cryptocurrencies.
BNP Paribas' decision to invest in Bitcoin ETFs represents a significant shift from its previous position. In September 2022, Sandro Pierri, head of BNP Paribas Asset Management's fund management group, had said, "We are not involved in cryptocurrencies and we don't want to be," adding that the firm had "not heard any significant interest" in cryptocurrencies from its client base.
* A 13F filing is a regulatory report that institutional investment managers in the US must submit to the Securities and Exchange Commission (SEC), the financial markets regulator. This report is required for any investment manager who exercises discretionary control over $100 million or more in securities assets.
The 13F report must be submitted quarterly and is intended to inform the public and regulators of the assets held by large institutional investors. It provides transparency on the equity positions of these investors and can include shares, warrants, options, trusts, among others.
The system helps monitor trends in institutional investment and can influence the decisions of other investors by revealing where the big market players are putting their money.
