More than 600 institutions and pension funds are rushing into the market

Institutional entry

More than 600 companies have disclosed significant investments in spot Bitcoin exchange-traded funds (ETFs) in 13F filings recently filed with the U.S. Securities and Exchange Commission (SEC). According to the disclosed data, professional investment firms have announced that they own Bitcoin ETFs worth up to $3.5 billion.

Millennium Management has become the largest investor in BTC ETFs, allocating up to $1.9 billion. Their investments include $844.2 million in BlackRock iShares Bitcoin Trust (IBIT), $806.7 million in Fidelity Wise Origin Bitcoin Fund (FBTC), and $202 million in Grayscale Bitcoin Trust (GBTC).

Next on the list was Schonfeld Strategy Advisors, a hedge fund with $13 billion under management, which invested $248 million in BlackRock's ETFs and another $231.8 million in Fidelity funds, for a total of $479 million.

Morgan Stanley, one of the leading financial institutions, has disclosed a massive investment of $269.9 million in GBTC, solidifying its position as one of the largest holders of GBTC. Aristeia Capital, an alternative asset management company, announced an investment of $163.4 million in IBIT.

Other financial giants such as JPMorgan Chase, Wells Fargo, UBS, BNP Paribas and Royal Bank of Canada are also on the list of investors.Although inflows have slowed significantly in recent weeks, the spot Bitcoin ETF experienced huge demand in the first three months after its launch in mid-January.

Pension admission

The Wisconsin pension fund has added Bitcoin to its balance sheet, purchasing more than $160 million worth of shares in two newly approved funds earlier this year.

U.S. Securities and Exchange Commission filings by the Wisconsin Investment Board show that the agency bought more than $99 million worth of Bitcoin exchange-traded fund (ETF) shares from investment giant Blackrock between January 1 and March 31. The investment board, known as SWIB, also bought another Bitcoin ETF from Grayscale worth about $64 million.

David Krause, an associate professor emeritus of finance at Marquette University, said there is a difference between buying Bitcoin itself and buying shares of a Bitcoin ETF. People can buy Bitcoin directly and store it in a digital wallet, but Krause said a Bitcoin ETF is more like a mutual fund. He said the ETF's shares are tied to the price of Bitcoin, but investors don't actually own the cryptocurrency.

“These are traded on stock exchanges,” Kraus said. “So they are liquid just like stocks. They are also regulated by the SEC. That gives investors confidence that they are not buying the asset directly.”

While $160 million is a lot of money, Kraus said it’s just a small portion of Wisconsin’s overall pension fund. As of the end of December, SWIB held more than $155 billion in assets, the vast majority of which are assets of the Wisconsin Retirement System.

“Like any good portfolio manager, you want to diversify,” Kraus said. “Now that bitcoin has been around for more than a decade, we’ve realized that not only does it provide pretty strong returns — sometimes pretty spectacular returns over a period of time — but it also has the ability to diversify. It doesn’t move directly with stocks and bonds.”

Krause said SWIB’s involvement in the Bitcoin fund is a “big deal” because it is considered one of the most respected pension funds in the country.

“I can assure you that most institutional fund managers are aware of this,” Kraus said. “Just a few days ago, Pension Magazine highlighted what Wisconsin did. So I’m pretty confident that pretty much everyone who runs a large pension fund or institutional fund is aware that SWIB took this action.”
“SWIB’s investment could bolster other pension funds’ confidence in the legitimacy and potential of a bitcoin ETF,” Fedenia said. “Seeing a high-profile institution like SWIB take the plunge could alleviate concerns about bitcoin’s volatility, regulatory risks and overall investment thesis.”

Final Thoughts

JPMorgan Chase, Wells Fargo, UBS, BNP Paribas and Royal Bank of Canada, Wisconsin Pension Fund... With a large number of traditional institutions and pension funds rushing into the market, perhaps the real bull market has just begun.