Capula Management, Europe’s fourth-largest hedge fund, has invested approximately $500 million in Bitcoin exchange-traded funds (ETFs) issued by BlackRock and Fidelity, according to a new filing.
The prominent British fund, overseeing around $30 billion worth of assets under management (AUM), holds over 4 million shares in the Fidelity Wise Origin Bitcoin ETF (FBTC), worth around $211 million, and over 7,4 million shares in BlackRock’s iShares Bitcoin Trust (IBIT), valued at $253 million.
Markets are down, and they may collapse further. Sadly, this move all all about the macro environment. Bitcoin is driven by liquidity. Right now, global liquidity is collapsing.
More Money Flowing Into BTC
Capula Management has joined other hedge fund giants previously disclosing holdings in IBIT, including Millennium Management. In May, the US fund manager reported owning nearly $2 billion in Bitcoin ETFs, including positions in IBIT and other funds.
IBIT has seen tremendous demand since its debut in January. As of May 2024, over 414 financial institutions, big and small, reported holdings in the ETF. According to Bloomberg Intelligence analyst Eric Balchunas, the number of IBIT holders is “mind-boggling” for a new ETF.
As of August 2, IBIT has $21.5 billion in AUM, outperforming Grayscale’s Bitcoin ETF (GBTC), which has seen constant capital outflows since it was converted from a trust. GBTC has around $12.7 billion in AUM as of August 5.
FBTC has also attracted considerable investment, with over $10 billion in assets as of June 2024. Like IBIT, the fund also features a competitive fee structure, with a 0.25% management fee, waived until August 2024.
The growing adoption of Bitcoin ETFs shows the increasing institutional interest in gaining exposure to the cryptocurrency market through regulated investment vehicles. BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) are currently leading choices among investors in the Bitcoin ETF market.
A recent report revealed that Morgan Stanley will be the first Wall Street firm to allow their financial advisors to recommend IBIT and FBTC to select wealth clients. The policy change will affect approximately 15,000 advisors within the firm and will take effect starting on Wednesday.
Bitcoin ETFs Trade Over $5 billion Amid Market Collapse
US spot Bitcoin ETFs recorded over $5 billion in trading volume in Monday’s US trading session, the highest level since mid-April.
BlackRock’s IBIT led with nearly $3 billion in trading volume and a $172 million increase in assets under management. Fidelity’s FBTC followed with over $858 million in trading volume.
Despite outflows of $148 million, GBTC still managed a trading volume of over $693 million.
Bloomberg’s Balchunas noted earlier today that the trading volume surpassed $2.5 billion around 10:45 AM, which was substantial for that early in the day. He noted that for Bitcoin bulls, high trading volume on a day when the overall market is down is a negative sign.
It often indicates fear among investors, which can lead to further price declines.
Conversely, high trading volume on a bearish day is beneficial for the ETF itself. It demonstrates strong liquidity, a key factor that attracts traders and institutional investors.
“On flip, deep liquidity on bad days is part of what traders and institutions love about ETFs, so you also want to see volume too, good for the long term,” Balchunase stated.
The surge in trading volume comes amid ongoing market turbulence likely due to bleak macro outlook and increasing selling pressure from Jump Trading. The cryptocurrency market cap is down 7% over the past 24 hours.
The price of Bitcoin (BTC) dipped below $50,000 early Monday, the lowest level since late February, according to CoinGecko. At press time, BTC has recovered above $54,000, down nearly $20,000 in 8 days.
Ethereum (ETH), the second-largest cryptocurrency, experienced sharp decline during the day. ETH is currently trading at around $2,500 up a little from Monday’s lows.
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