why 13F report matters for the crypto industry

A new quarterly 13F report has revealed that the world’s largest companies are investing significant sums in Bitcoin ETFs. What does this mean for the crypto industry?

Several hundred U.S. firms have filed Form 13F with the Securities and Exchange Commission (SEC). What is particularly interesting for the crypto market is that many institutional investors own shares of the spot Bitcoin ETF.

How does Form 13F work?

13Fs are quarterly reports filed with the SEC by institutional investment managers with at least $100 million under management. 13Fs provide information regarding stock ownership at the end of each quarter.

One of the requirements of the US regulator is a periodic report on financial transactions and positions. Large investment companies such as funds, managers, trust companies and other firms are required to submit this report.

This is done to control the transparency of the market; Large capital with large volumes of transactions can shift prices in the desired direction. If the SEC sees collusion or an attempt to artificially manipulate prices, transactions will be pursued.

The report contains the following data:

List of securities owned by the fund. Issuer names are arranged in alphabetical order; Paper class. For example, common or preferred shares, put/call options, etc.; Number of securities owned; Market value at the end of the calendar quarter.

But the main disadvantage of this form is the reliability of the information. The investor submits quarterly information reflecting the portfolio structure at the end of the reporting period.

Short-term transactions executed within the quarter are separate from the form. Additionally, no one guarantees that the report was completed correctly, so the SEC cannot verify the details of the report.

What’s interesting about 13F for the crypto industry?

The approval of spot Bitcoin ETFs in January opened the door to new investment opportunities in “digital gold.” Investors can watch the price movement of BTC without ever holding it in their hands.

Instead of dealing with crypto exchanges and wallets alone, the investor can purchase Bitcoin ETF shares through regular accounts. The Bitcoin spot ETF has served to expand Bitcoin’s acceptance and increase its liquidity. This hypothesis is clearly confirmed in the latest 13F report.

Overall, 13F filings confirmed that 937 major institutional investors invested in Bitcoin ETFs. Gold exchange-traded funds were much less popular: 95 companies were associated with the precious metal as of March 31.

Source: K33 Research

“Retail has the majority of sales. Professional investors had $11.06 billion in exposure at the end of the first quarter, representing 18.7% of BTC ETF AUM.”

Vetle Lunde, Senior Analyst at K33 Research

Millennium is the largest holder of Bitcoin ETF shares, with $1.9 billion on the hedge fund’s balance sheet. According to first quarter 2024 results, the Wisconsin State Investment Board (SWIB) invested $162.7 million in securities of exchange-traded funds.

Morgan Stanley owns a $269.9 million stake in Grayscale’s GBTC exchange-traded fund. Thus, the bank ranks third among institutions in terms of the volume of these securities on its balance sheet.

Additionally, the financial giant purchased $2.3 million worth of shares of the ARKB fund from ARK Invest. The bank is among the top 20 ARKB holders among institutions.

It turns out that JPMorgan Chase has five spot Bitcoin ETFs. The banking giant has invested a total of $760,000 in Bitcoin ETFs including iShares Bitcoin Trust, Grayscale Bitcoin Trust, ProShares Bitcoin Strategy ETF, Fidelity Wise Origin Bitcoin Fund, and Bitwise Bitcoin ETF.

Is Bitcoin the future asset for institutional investors?

Only long positions and stock options in U.S. stocks must be disclosed in 13F filings. Accordingly, the documents do not require the disclosure of information regarding short positions, that is, the short sale of a particular asset, which means that they present only a partial picture of the overall strategy of the chosen giant.

Moreover, even a specific look at companies’ investments sheds light on their interest in a particular product. The fact that almost ten times more companies are interested in spot Bitcoin ETFs compared to gold suggests that it is time for a new Bitcoin era.

The green road for the crypto market

Institutions invested $3.5 billion in Bitcoin ETFs, accounting for 29% of total capital inflows. Investments in Bitcoin ETFs by the world’s largest companies are among the main positives of the sector this year. Still, such actions signal that BTC is evolving into a recognized asset class in demand among top investors.

Bitcoin’s rise coincided with the increase in money in spot ETFs and the release of the 13F report. Analytics platform Santiment recorded total volume of $5.65 billion on May 16; This is the best figure since March 24. Analysts say the days when whales were merely hoarders are fading into oblivion.

Source: Santiment

Bloomberg senior analyst Eric Balchunas also points out that the success of the BlackRock IBIT fund is one of the most critical metrics for exchange-traded funds.

$IBIT The first 13F season resulted in 414 reporters, a mind-boggling record. Even having 20 in a newborn is bfd and extremely rare. Let’s take a look at how BTC ETFs compare to other ETFs launched in January (aka Class of 2024) on this metric. pic.twitter.com/ngicEdbaTq

— Eric Balchunas (@EricBalchunas) May 16, 2024

While 414 institutional investors invested in BlackRock’s IBIT alone in the first quarter, Balchunas traditionally calls 20 such investors a good indicator for the fund’s first quarter.

What’s next?

The release of the 13F report caused a short-term increase in the rate of the first cryptocurrency last week. However, the overall long-term trend also looks positive; Institutional interest in Bitcoin products is clear, meaning there is a chance for further capital growth in the Bitcoin ETF sector.