What traditional Wall Street financial institutions have bitcoin holdings?

On January 4, 2021, after bitcoin prices jumped past $34,000, the Financial Times said that "cryptocurrencies are becoming more integrated into the financial system".

This is a milestone day. Eight years later, the famous international financial media, the financial times in his 450000 readers declare their opinion on the currency changed, as when the currency price for $138 in 2013, the financial times, wrote in the headlines "Goining it buying frenzy sends virtual currency on way to becoming the next mercifully (mad tide to purchase virtual currency became the next bubble)".

The Financial Times is really a summary of the traditional institutional voices on Wall Street.

There's pretty much a consensus about this bull market: It's an institutional bull, and institutions have been voting for their options with their money and buying bitcoin explicitly as their asset allocation. The combination of institutional entry and the abundance of channels for retail investors to buy bitcoin has pushed the currency to new highs. At one point, its market capitalization surpassed Facebook and made it the seventh most valuable asset in the world, behind Alphabet A (parent company of Google) and Tesla.

So who exactly are the traditional funds and institutions holding bitcoin?

The Blockbeats group counts companies that have publicly disclosed holdings of bitcoin. Restricted by financial markets and regulations of various countries, enterprises and institutions that purchase bitcoin are divided into direct purchase and indirect purchase.

An institution that buys bitcoin directly

Financial institutions

Bridge capital

On Jan. 4, 2021, alternative investment firm SkyBridge Capital announced the launch of the "SkyBridge Bitcoin Fund LP." To launch the fund, Skybridge Capital and its affiliates have invested $25.3 million. Meanwhile, on Jan. 4, Skybridge Capital had invested $310 million in a bitcoin fund in November and December 2020 on behalf of its flagship funds.

The SkyBridge Bitcoin Fund will be managed by Fidelity Digital Assets as the Bitcoin Trustee and Ernst & Young as the auditor, according to SkyBridge Capital officials. The fund, which charges a 0.75 per cent management fee and no incentive fee, can be subscribed directly through its website, with a minimum investment of $50,000.

In 2017, Skybridge Capital planned to sell its majority stake to HNA Capital (USA), according to Injun Blockbeats. If completed, HNA Capital will own 80 per cent of SkyBridge Capital. In 2018, because of the US Foreign Investment Review Committee (CFIUS) blocked, Skybridge Capital and HNA Capital merger plan.

Miller Value Partners

The MVP 1 Fund, a hedge fund run by Miller Value Partners, has about $41.9 million in assets, with management owning 79% of the fund. Bill Miller, founder, chairman and chief investment officer of Miller Value Partners, said in his Q4 2020 market analysis letter that in an inflationary environment, more and more institutional money will be buying bitcoin.

Bill Miller previously managed funds at Legg Mason, where his funds beat the S&P 500 for 15 years in a row from 1990 to 2005. In 1990, half of Miller's fund was in AOL (20%), Dell (20%), and Fannie Mae (10%). Miller's second big single investment came in 2017, in Bitcoin.

At the end of 2017, the value of bitcoin accounted for half of the MVP 1 fund, Miller said in an interview. The main reason, of course, is the massive rise in bitcoin. In 2014, Miller spent 1 percent of his net worth on bitcoin, according to public information. At the same time, Miller continued to add positions in 2015. According to Miller's podcast, the average price of bitcoin purchased in 2014 and 2015 was $350.

Currently, the minimum investment for the MVP 1 Fund is $1 million.

Rally note: At present, MVP 1 Fund can no longer be queried through Miller Value Partners, and part of the Data comes from Private Fund Data.

MassMutual

On December 11, 2020, MassMutual, one of the top five life insurance companies in the United States, purchased $100 million worth of Bitcoin for its general insurance account through New York Digital Investment Group (NYDIG). The investment represents just 0.04% of MassMutual's investment book, which is worth about $235 billion. MassMutual currently holds a US $5 million minority interest in NYDIG.

Tudor Investment Corp

Tudor Investment Corp is an asset management firm founded by billionaire Paul Tudor Jones. In May 2020, Paul Tudor Jones said it bought between 1% and 2% of Bitcoin assets under its investment management. Tudor Investment manages about $38.3 billion in assets, of which $21.5 billion is accounted for by the Tudor BVI Global Fund, through which Jones made his bitcoin purchases.

Currently, the minimum investment for participation in the Tudor BVI Global Fund is US $10 million.

The listed company

There are now 16 listed companies around the world that have declared holdings of Bitcoins, representing a total of about 115,300, or 0.54 per cent of the total, according to data from the Bitcoin Treasuries.

The publicly traded company buying the most bitcoin, MicroStrategy, is a 32-year-old business intelligence and mobile software company. Shares of MicroStrategy traded as high as $3,330 a share in 2000, just before the dotcom bubble burst. Then, for nearly two decades, the former star's stock price peaked at just $226. By August 2020, Microstrategy had invested $250 million in bitcoin as an inventory reserve asset, citing diminishing cash returns, a weak U.S. dollar and other global macroeconomic factors, and the stock price had hit its highest level since 2001.

Then, along with Bitcoin's skyrocketing price, the return on owning bitcoin spurred growth. MicroStrategy  Share prices keep rising. After the gains, Microstrategy raised another $650 million in senior convertible bonds and bought all of bitcoin. Some investors describe it as a "perpetual motion machine", where a public company buys bitcoin and the price of the currency rises, which boosts the company's revenue, which in turn leads to a rise in the company's stock price.

Of course, it's not just about cryptocurrencies. The same logic applies to baijiu funds and tech stocks in 2020.

An organization that indirectly buys bitcoin

At present, the "Grayscale Bitcoin Trust" launched by Grayscale Investment is a product that is relatively easy for ordinary investors, private funds and public offering funds to indirectly buy Bitcoin. This is a Bitcoin fund in the form of a trust, can accept physical (i.e., bitcoin) or cash subscription, held in the form of GBTC, a lockup period of six months, the expiration of which can be bought and sold through the OTC Market.

Before that, in 2019, Bank of China Fund issued a QDII fund financial product "Silver Global Strategic Securities Investment Fund (FOF)" also purchased 13,000 shares of GBTC worth 1.35 million yuan.

Legacy Blockbeats has compiled a list of institutions that have recently revealed that they still hold GBTC:

Three Arrows Capital, which holds the most GBTC, is a Singapore-based hedge fund founded in 2012 to invest in cryptocurrency infrastructure, decentralized financial projects and derivatives platforms. Three Arrows Capital is also a shareholder in GBTC's second largest entity, BlockFi. BlockFi is a crypto asset lending platform that closed a $30 million Series B funding round in February 2020. According to Blockfi CEO Zac Prince, Blockfi could go public as early as the second half of 2021.

In addition, ARK, the fund managed by Catherine Wood, known as the "female version of Warren Buffett", invested in GBTC as early as 2015, and its "Next Generation Internet ETF" ARKW increased its stake in GBTC by 780,000 shares in the last month, valued at more than $35 million. In the past five years, ARKW ranked sixth in the global ETF with a total investment return of 555.79%, among which GBTC is its third largest holding, accounting for 4.73% of its total funds.

Ark is followed by Horizon Kinetics, a hedge fund, with GBTC shares. Horizon Kinetics' five trusts and a closed-end Fund hold GBTC, with a combined stake of 5.18 million GBTCs, valued at about $230 million. In addition to the GBTC purchase, Horizon Kinetics is also involved in bitcoin mining, hosting its mines at Core Scientific, which owns   450MW power load at the mine.

Notably, the Rothschild family's Investment company, Rothschild Investment Corp, also holds bitcoin indirectly through its GBTC holdings.

conclusion

In 2020, more and more institutions and businesses will begin to accept and buy bitcoin. Bitcoin's global influence is also growing. For now, however, Bitcoin's global impact is still not quite the same as gold's. Based on the value of the world's gold reserves, the price of a single bitcoin would have to rise to $380,000 to be equivalent to gold.

It's hard to tell whether this is an inter-institutional hype or a return to Bitcoin's value. There is no shortage of perpetual motion machines in capital markets, just the duration.

Bitcoin is a social experiment, and each business that buys it may have different ideas. Every business is simply choosing the world it wants with the money in its pocket.

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