By
Steve Muchoki
May 17th, 2024
BNP Paribas, the second-largest European bank, holds a modest amount of spot Bitcoin ETFs. According to a 13F filing submitted by the company, the bank acquired 1,030 units of BlackRock’s iShares Bitcoin Trust (IBIT), representing an investment of approximately $41,684.
While the investment may seem small given the bank’s extensive portfolio of $600 billion in assets under management (AUM), it marks a significant initial step for the company as it explores Bitcoin (BTC) investments.
The bank’s journey into the crypto space began in 2022 with a partnership with Metaco to develop a crypto custody offering to facilitate the issuance, transfer, and secure storage of regulated digital assets for clients.
Since then, BNP Paribas has strategically invested in the industry, supporting startups in navigating the burgeoning digital economy.
Notably, the bank, alongside Goldman Sachs, led a substantial $100 million investment round for Fnality International last year. Fnality International specializes in leveraging blockchain technology for secure and efficient cash transfers between financial institutions.
Paribas’ recent investment in spot Bitcoin ETFs coincides with the current decline in institutional adoption of the funds. On Thursday, the total outflows for the investment vehicle reached $563.7 million, the highest it has seen in a single day since inception in January.
Fidelity’s FBTC took the lead, with more than $191 million leaving the fund, with Grayscale’s GBTC closely trailing behind with a $167.3 million net outflow.
Institutional Debate on Bitcoin ETFs
The low institutional adoption of the Bitcoin ETFs has sparked significant discussions within the crypto community on X. Jim Bianco, from Bianco Research, believes that institutional investors are hesitant to invest in Bitcoin ETFs due to perceived lack of attractiveness.
In response, Eric Balchunas, a senior ETF analyst at Bloomberg, countered Bianco’s view, anticipating widespread adoption of these products once investment advisors start reporting their 13F filings this month.
Balchunas highlighted that although the majority of 13Fs are yet to be submitted, approximately 150 advisors from across the country have already reported owning a spot ETF.
“The majority of 13Fs have yet to roll in, and there are already something like 150 advisors (from all over the country) who have reported owning a spot ETF,” he wrote on X.
He foresees a surge in institutional advisors opting for Bitcoin ETFs, with over 500 advisors expected to report ownership by May 15th.
Balchunas predicts that this heightened interest among advisors would set new records for the first three months of the market, signaling a potential turning point in the institutional adoption of Bitcoin ETFs.