Goldman Sachs jumps into bitcoin ETFs while Morgan Stanley retreats

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

Goldman Sachs jumps into bitcoin ETFs while Morgan Stanley retreats

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

When the SEC opened the door in January for bitcoin exchange-traded funds to hit the mainstream, many traditional financial institutions across Wall Street and beyond finally had the opportunity to buy into crypto. Since then, money has poured in, but in fits and starts.

On Wednesday, banks and hedge funds with more than $100 million in assets hit a deadline to file their second-quarter 13F reports, disclosing their investments and what they bought and sold over a three-month stretch.

Goldman Sachs went big in the quarter, while rival Morgan Stanley trimmed down its crypto holdings. JPMorgan has yet to make a big splash.

There are no shortage of opportunities for firms that want to take their time getting into the market. Following an array of public ETF listings in January tied to bitcoin, the SEC went a step further last month, clearing the way for spot ether ETFs, allowing investors to get access to the second-largest cryptocurrency. Those new holdings will start showing up in third-quarter reports.

In the ******* from March through June, Goldman Sachs made its debut in the crypto ETF market, purchasing $418 million worth of bitcoin funds. Its biggest position is a $238 million ownership in shares of BlackRock’s iShares Bitcoin Trust. The bank also owns shares in spot funds from Grayscale, Invesco, Fidelity and others.

Morgan Stanley was the first among the big players on Wall Street to give the green light to its 15,000 financial advisors to start pitching clients, who have a net worth north of $1.5 million, bitcoin ETFs, specifically those issued by BlackRock and Fidelity. Up to this point, wealth management businesses have only facilitated trades if customers requested exposure to the new spot crypto funds.

Of Morgan Stanley’s 

This is the hidden content, please

• Sign In
• or
• Sign Up

, the bank disclosed in

This is the hidden content, please

• Sign In
• or
• Sign Up

that it trimmed its position in spot bitcoin ETFs to around $189 million from roughly $270 million. Most of those cuts were due to sales of

This is the hidden content, please

• Sign In
• or
• Sign Up

in the Grayscale Bitcoin Trust, which has a much higher management fee than other ETFs. The vast majority of the bank’s spot bitcoin holdings are now through the iShares trust.

JP Morgan

This is the hidden content, please

• Sign In
• or
• Sign Up

of around $42,000 worth of shares in Grayscale’s bitcoin fund and another $18,000 worth of the ProShares Bitcoin Strategy ETF. HSBC has

This is the hidden content, please

• Sign In
• or
• Sign Up

worth of spot bitcoin holdings, all from the fund issued by Ark 21Shares, UBS has

This is the hidden content, please

• Sign In
• or
• Sign Up

worth of spot bitcoin ETF holdings, and Bank of America has collective holdings

This is the hidden content, please

• Sign In
• or
• Sign Up

, mostly from BlackRock and Fidelity.

For most of the banks, the vast majority, if not all, of the ETF flows can be attributed to wealth management clients asking for exposure, rather than a decision by the firm to hold the assets on its balance sheet.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

While Wall Street investment banks are coming in slowly, hedge funds are taking a more aggressive approach.

Millennium Management, which oversees $62 billion, now holds

This is the hidden content, please

• Sign In
• or
• Sign Up

, and is the is the single largest holder of shares in BlackRock’s bitcoin fund, with shares worth

This is the hidden content, please

• Sign In
• or
• Sign Up

.

That’s down substantially from the $844 million worth of shares it held

This is the hidden content, please

• Sign In
• or
• Sign Up

, having cut its stake in BlackRock’s fund by about half, and in Grayscale’s by more than half.

London-based Capula Investment Management, one of the top hedge funds in Europe with

This is the hidden content, please

• Sign In
• or
• Sign Up

, disclosed in a

This is the hidden content, please

• Sign In
• or
• Sign Up

that it holds more than $464 million in spot bitcoin ETFs, including the funds offered by BlackRock and Fidelity.

Point72 Asset Management and Elliott Investment Management have also jumped into the market as have firms including Apollo Management, Citadel Advisors, Jane Street and Fortress Investment Group.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

Since launching in January, spot bitcoin funds have seen net flows of around $17.5 billion, bringing total assets in the funds to $53.5 billion as of mid-August. Grayscale’s fund, which existed previously and was converted to an ETF, has seen $19.4 billion in

This is the hidden content, please

• Sign In
• or
• Sign Up

since the change, though its new budget product has seen net inflows of $274 million.

Spot ether ETFs hold more than $7.6 billion as of Tuesday. Barclays analysts noted that trading volume across all spot crypto ETF products has declined, compared to spot exchange volumes.

Still, the new ETF activity has helped lift bitcoin prices, which hit a record above $73,000 in March. The price has since dropped sharply, to under $58,000, alongside volatility in the boarder markets, though it’s still up more than 30% this year.

“The crypto markets are strong because we have the sentiment shift,” Galaxy Digital chief Mike Novogratz told CNBC in May. “Crypto is now an asset class. It will be next year, it will be forever. And it wasn’t that way two years ago. There was risk around the asset class, and it’s been de risked.”

Read more about tech and crypto from CNBC Pro

Bitcoin mining lures new investors

ETFs aren’t the only way investors are playing the market.

Daniel Sundheim’s D1 Capital built up a bitcoin mining position in the latest quarter, taking advantage of a shift as miners retrofit their facilities to service artificial intelligence clients. Like crypto mining, AI workloads require immense amounts of power.

D1, which managed about $19 billion at the beginning of the year, bought nearly $5.4 million worth of Bitdeer Technologies, $17.3 million of Iris Energy, and nearly $17.4 million in shares of Hut 8 Corp.

Hut 8 said in its 

This is the hidden content, please

• Sign In
• or
• Sign Up

 that it had purchased Nvidia’s AI processors and secured a customer agreement with a venture-backed AI cloud platform as part of its expansion. Iris Energy expects to generate up to $17 million in annual revenue from its AI cloud services.

The combined market capitalization of the 14 major U.S.-listed bitcoin miners hit a record high of $22.8 billion on June 15, according to a note from JPMorgan, which has also been

This is the hidden content, please

• Sign In
• or
• Sign Up

capital into an ETF of miners and individual companies. UBS has added shares of Bitdeer, Bitfarms, Bit Digital, Hut 8, as well as more than $5 million in Iris Energy, as of its 

This is the hidden content, please

• Sign In
• or
• Sign Up

.

Sundheim, who previously

This is the hidden content, please

• Sign In
• or
• Sign Up

, has changed his tune on bitcoin. In 2019, he equated ********* **** companies to the

This is the hidden content, please

• Sign In
• or
• Sign Up

.

WATCH: Bitcoin miners are shifting to AI

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

This is the hidden content, please

• Sign In
• or
• Sign Up

#Goldman #Sachs #jumps #bitcoin #ETFs #Morgan #Stanley #retreats

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up