Jaffe Tilchin Funding Investment Partners was one of several corporations that disclosed their investments in spot Bitcoin ETFs on Friday, May 16, 2024.
The Florida-based funding supervisor and insurance coverage companies advisor revealed it invested $11.3 million in spot Bitcoin ETFs in the course of the first quarter — comprising $9.8 million in BlackRock’s IBIT and $1.6 million in Grayscale’s GBTC.
WealthPlan, a funding advisor based in Nebraska, revealed funding of $2.2 million in GBTC. On the other hand, Skyview, a funding advisor located in New Jersey, disclosed funding of $1.3 million in GBTC.
Texas-based Comerica Financial institution reported $647,000 invested throughout 4 funds, together with $361,395 in GBTC, $225,013 in IBIT, $33,219 in Ark’s ARKB, and $28,051 in Constancy’s FBTC.
Nearly One Thousand Corporations Made Investments
The disclosures meet the investment requirements of various prominent companies, including major stakeholders like Millenium Management and Schonfield Strategic Advisors, as well as leading global banks such as Morgan Stanley, JP Morgan Chase, Wells Fargo, BNP Paribas, and UBS.
In general, practically 1000 corporations have invested in spot Bitcoin ETFs since their launch in January.
K33 Analysis senior analyst Vetle Lunde reported that 937 skilled corporations had invested greater than $11 billion in US spot Bitcoin ETFs in the course of the first quarter.
Bloomberg ETF analyst Eric Balchunas posted an identical estimate, stating that 929 establishments owned no less than one spot Bitcoin ETF — with 414 traders proudly owning BlackRock’s IBIT.
The SEC accredited spot Bitcoin ETFs in January, making the primary quarter the primary time traders may buy spot Bitcoin ETFs. The exception is GBTC, which was out there earlier than its conversion to an ETF.
Winners And Losers In The US Spot Bitcoin ETF Race
While cryptocurrency has a reputation for drawing investors from outside the mainstream, the biggest winners of the newly launched spot bitcoin funds are two of the best-known names in the industry.
Since bitcoin spot exchange-traded funds (ETFs) began trading in the US on January 11, investors have poured $12.1 billion (£9.7 billion) into them, of which over 80% has gone to either BlackRock’s iShares brand or Fidelity Investments.
Meanwhile, the Grayscale Bitcoin Trust, now ETF – the favored crypto-tracking ETF for investors before the advent of spot bitcoin funds – has seen $17.2 billion go out the door.
Grayscale, which heavily lobbied the Securities and Exchange Commission (SEC) for permission to launch spot bitcoin ETFs, has seen the assets in its fund plummet to $17.6 billion from $27.2 billion in February.
The Arduous Journey Towards Bitcoin ETFs
The SEC’s approval of the first spot bitcoin ETFs in January was a long-awaited development for crypto enthusiasts and fund companies looking to join the fray.
Before that time, the SEC they have had banned ETFs from holding bitcoin directly. Those who were not interested in purchasing and holding the cryptocurrency themselves could opt to invest in the Grayscale Bitcoin Trust or gain indirect exposure through ETFs that followed bitcoin’s price through futures contracts, like the ProShares Bitcoin Strategy ETF (BITO) with $2 billion in assets. However, both options had drawbacks. The Grayscale Bitcoin Trust charged a 2% expense ratio fee, and both methods frequently faced challenges in accurately tracking the price of Bitcoin due to their respective structures.
The Grayscale Bitcoin Trust was the only way US investors could invest in Bitcoin directly rather than through futures, besides holding the cryptocurrency itself. This was because the SEC didn’t allow spot bitcoin ETFs – funds that hold the asset directly, as opposed to tracking it via futures markets. It rejected multiple proposals to open spot bitcoin ETFs after the first application in 2013.
Grayscale sued the agency in 2022 over its refusal to let Grayscale convert its trust into an ETF. The next year, Ark Investments and BlackRock (BLK) attracted more attention by asking for approval to launch spot bitcoin ETFs. Grayscale won its case in August of 2023, and on January 10, 2024, the SEC approved 11 ETF proposals. The next day, 10 of them, including Grayscale’s newly converted ETF, began trading.
Spot Bitcoin ETFs Winners And Losers
Since all the funds hold the same asset, they have roughly the same performance, with returns for all hovering around 28% as of the end of April since their launch in January.
Although the performance of these new ETFs has been almost the same, the reactions from investors have varied greatly. Since its inception, the iShares Bitcoin Trust ETF (IBIT) has attracted $15.6 billion from investors and currently holds $16.5 billion in assets. On the other hand, the Fidelity Wise Origin Bitcoin ETF (FBTC) has received $8.2 billion in investments and has assets totaling $9.2 billion.
Funds from smaller players like ARK and Bitwise also raked it in. The ARK 21Shares Bitcoin ETF (ARKB) pulled in $2.2 billion and now has $2.6 billion in total assets. Investors put $1.8 billion into Bitwise Bitcoin ETF (BITB), which sits at $2 billion in assets.
Grayscale has been the most prominent casualty of the rollout, with investors withdrawing $17.2 billion from its ETF. Despite reducing its ETF fees from 2.0% to 1.5%, Grayscale’s fees remain significantly higher compared to other spot ETFs, which have expense ratios ranging from 0.19% to 0.25%.
Most of the funds temporarily cut or even eliminated fees during the early launch period. iShares’ fund cut its expense ratio to a discounted rate of 0.12%, while others, including Fidelity’s fund, cut theirs to zero for differing introductory periods. Each fund has a different introductory offer, and the discount for each expires at a different date.
