The price of the flagship cryptocurrency Bitcoin (BTC) recently plunged from over $63,000 to a low just above the $56,000 mark before starting to recover, with over $300 billion exiting the cryptocurrency space as a result. Despite the volatility, sovereign wealth funds are eyeing the cryptocurrency.
Bitcoin is up more than 39% so far this year and over 106% over the last 12 months partly over the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States, some being launched by the world’s largest asset managers BlackRock and Fidelity.
According to a recent report, an executive at BlackRock has revealed sovereign wealth funds are showing interest in gaining exposure to Bitcoin through its iShares Bitcoin Trust (IBIT) ETF, and could start trading it over the next few months.
BlackRock’s head of Bitcoin and crypto, Robert Mitchnick, was quoted as saying:
Many of these interested firms—whether we’re talking about pensions, endowments, sovereign wealth funds, insurers, other asset managers, family offices—are having ongoing diligence and research conversations, and we’re playing a role from an education perspective.
Notably, last month rumors suggested that Qatar’s sovereign wealth fund was looking to make a major investment in Bitcoin, with Max Keiser saying it could be of up to $500 billion. Qatar’s sovereign wealth fund, the Qatar Investment Authority, has total assets of $475 billion, however, and is unlikely to shift the entire fund into a single asset.
Such an investment would nevertheless show a significantly different attitude towards digital assets. Foreign wealth funds like Kuwait’s Invstment Authority (KIA), the oldest sovereign wealth fund in the world, and Norway’s well-known $1.6 trillion wealth fund, could make ripples in the market with even conservative allocations.
As CryptoGlobe reported BNP Paribas, the second-largest bank in Europe whose asset management arm has over $600 billion in assets under management, has gained exposure to the flagship cryptocurrency via a spot exchange-traded fund.
Large institutional investors managing over $100 million in assets have to, every quarter, disclose their holdings via 13F filings and after the successful launch of spot Bitcoin exchange-traded funds in the U.S., these filings have been closely watched by industry sleuths.
While previous filings for the first quarter of 2024 showcased purchases by asset managers, family offices, and several smaller banks, BNP Paribas’ involvement marks a turning point even though the bank allocated a miniscule part of its holdings to the flagship cryptocurrency, acquiring around $40,000 worth of it.
Featured image via Unsplash.
