Wall Street Increases Bitcoin Investments
Wall Street has significantly expanded its involvement in bitcoin during the second quarter, acquiring positions not only in spot bitcoin exchange-traded funds (ETFs) but also in U.S. stocks that are closely linked to the cryptocurrency’s market performance, as revealed by recent filings with the Securities and Exchange Commission (SEC).
Brevan Howard Boosts Its Bitcoin ETF Holdings
Brevan Howard has nearly doubled its investment in BlackRock’s iShares Bitcoin Trust (IBIT) during the second quarter, according to a securities filing. The macro-focused hedge fund increased its holdings to 37.9 million shares by the end of June, up from approximately 21.5 million in March. This stake was valued at over $2.6 billion based on IBIT’s closing price on June 28, positioning Brevan Howard among the largest institutional investors in IBIT, alongside Goldman Sachs, which raised its own position to $3.3 billion in IBIT and Fidelity’s Wise Origin Bitcoin Trust (FBTC). Goldman Sachs also reported holding $489 million in the iShares Ethereum Trust (ETHA).
Goldman Sachs’ ETF Positions Explained
Goldman Sachs’ ownership of these ETFs does not necessarily indicate a direct bet by its trading desk on the price of bitcoin; instead, it likely reflects positions managed by Goldman Sachs Asset Management on behalf of its clientele. In contrast, Brevan Howard, renowned for its macro trading strategies, has been actively involved in the cryptocurrency sector and manages a specialized division called BH Digital, which oversees billions in assets focused on blockchain technology, decentralized finance, and similar innovations.
Notable Institutional Investors in IBIT
Other significant investors in IBIT include Harvard University, which announced a $1.9 billion stake in the ETF, and Mubadala Investment Company from Abu Dhabi, which continues to hold $681 million. Among U.S. banks, Wells Fargo has increased its IBIT holdings nearly fourfold to $160 million, up from $26 million the previous quarter, while also maintaining a $200,000 investment in the Grayscale Bitcoin Fund (GBTC). Cantor Fitzgerald has similarly raised its holdings to over $250 million and has increased its investments in crypto-related stocks such as MicroStrategy (MSTR), Coinbase (COIN), and Robinhood (HOOD).
Jane Street’s Significant Position in IBIT
Trading firm Jane Street has disclosed a $1.46 billion investment in IBIT, which now stands as the largest single position in its portfolio, surpassing its $1.41 billion stake in Tesla (TSLA). The firm has also increased its investment in MicroStrategy while scaling back its holdings in FBTC.
Understanding Spot Bitcoin ETFs
Spot bitcoin ETFs like IBIT, which debuted in January, enable investors to gain exposure to bitcoin’s price without the need to directly own the cryptocurrency. This structure provides traditional institutions a pathway to engage in the crypto market using familiar brokerage accounts and custodial services.
Norway’s Sovereign Wealth Fund Expands Bitcoin Exposure
For international entities, acquiring bitcoin is often more straightforward through U.S.-listed firms that possess significant BTC holdings. Norway’s sovereign wealth fund exemplifies this strategy, with several European state-backed investors opting for equity stakes in companies associated with cryptocurrency rather than holding bitcoin directly. Norges Bank Investment Management (NBIM), which manages Norway’s $2 trillion pension fund, now indirectly holds 7,161 BTC, according to a recent report from K33 Research. This marks a 192% increase from 2,446 BTC a year ago and an 87% rise from 3,821 BTC at the end of 2024.
Contextualizing Norway’s Bitcoin Holdings
The bulk of its exposure, amounting to 3,005 BTC, is derived from shares in MicroStrategy, with the remainder distributed among companies such as Marathon Digital, Coinbase, Block, and Metaplanet. K33 also included GameStop and other smaller holdings in its total calculation. However, despite this substantial increase, Norway’s bitcoin-related investments still constitute a minor part of its overall portfolio, which encompasses thousands of companies across various global markets. At the current market price of $117,502 per BTC, the value of the fund’s 7,161 BTC is approximately $841 million, representing less than 0.05% of the $2 trillion portfolio. Although the recent growth may indicate a rising institutional acceptance of bitcoin, it does not signify a significant strategic pivot at this stage.
