Fidelity's Bitcoin ETF Hits Record with $40M Investment Amid Slowing Demand
Summary:
Fidelity's Bitcoin exchange-traded fund (ETF) becomes the largest investment in a Bitcoin fund, amassing $40 million from traditional US finance advisers, Legacy Wealth Management and United Capital Management of Kansas. Despite this, concerns are raised about limited mainstream participation in Bitcoin ETFs, with some labeling first-quarter allocations as disappointing. Fidelity's fund is the second-largest Bitcoin ETF, with slowed demand noted since March.
The Bitcoin exchange-traded fund (ETF) managed by Fidelity has set a new record by becoming the largest single funding into a Bitcoin fund. It garnered a $40 million investment from two US-based traditional finance advisors. Bloomberg analyst Eric Balchunas reported that both Legacy Wealth Management and United Capital Management of Kansas recently invested $20 million each into shares of Fidelity’s Wise Origin Bitcoin Fund (FBTC), making them part of the top shareholders of the fund. Legacy Wealth Management supervises over $359 million in assets, while United Capital Management of Kansas oversees more than $436 million. These figures were revealed in the recent 13F form submissions to the U.S. Securities and Exchange Commission (SEC) for the first quarter of 2024.
Investment research firm Fintel data shows that Bitcoin comprises 6% and 5% of the total portfolios of these funds. Balchunas from Bloomberg interprets this as a growing acceptance amongst more conventional investors. He stated, “This is as Boomer as it gets,” indicating towards United Capital Management of Kansas' investment into a Bitcoin fund. The move is seen as a positive sign for those advocates for wider adoption of digital currency, though a displeasure for skeptics.
However, some concerns have been raised about the relatively limited mainstream participation in BTC ETFs after the recent disclosures. Jim Bianco, founder of Bianco Research, remarked that the allocation data from the first quarter was underwhelming, noting, “Unrealized gains are dwindling quickly,” in reference to the diminished ETF investor gains versus current Bitcoin prices.
When it comes to assets under management, Fidelity's BTC fund is currently the second largest Bitcoin ETF, with over $10 billion, sitting just behind BlackRock's iShares Bitcoin Trust (IBIT), which boasts of more than $18 billion. Even with a rising number of entrants and increasing acceptance from conventional investors, demand for Bitcoin ETFs is experiencing a slump. Ki Young Ju, CryptoQuant CEO, observed that BTC funds' demand has remained stagnant since peaking in March, with Bitcoin ETFs seeing net outflows of $36.7 million on April 15. As Farside Investors reports, only Grayscale and BlackRock noted positive flows on April 12 and April 15, with all other funds experiencing outflows.
Published At
4/23/2024 8:56:57 PM
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