BNP Paribas, the second largest bank in Europe in terms of assets under management, has announced its investment in Bitcoin using BlackRock’s spot ETF tool.
The exposure of the credit institution on cryptocurrency has been revealed through form 13F, a quarterly report filed with the Securities and Exchange Commission that shows all the company’s managed activities.
Although the investment in IBIT may seem modest compared to the economic possibilities of the banking giant, its entry into the world of Bitcoin ETFs marks an important step towards achieving mainstream acceptance of this asset class.
Let’s see all the details below.
Summary
French bank BNP Paribas has purchased BlackRock’s Bitcoin spot ETF: details from form 13F
According to the information from the 13F form filed on April 31, 2024 with the SEC, the bank BNP Paribas would have purchased shares of BlackRock’s iShares Bitcoin Trust (IBIT) for $41,600.
Despite the figure being quite small, especially if we consider the second largest banking group in Europe with an AUM of 600 billion dollars, its entry sets an important precedent for other credit institutions that may intend to expose themselves to Bitcoin.
Going into more detail, based on what is reported in model 13F, which we remind you is mandatory for managers with institutional investments above 100 million dollars, BNP Paribas would have purchased 1,030 shares of IBIT in the first quarter of 2024 at $40.47 per share, for a total of $41,684.10, less than the value of a single Bitcoin at current prices.
Other banking giants and asset managers have entered the doors of the cryptographic market with Bitcoin spot ETFs. Among these are the best known Park Avenue Securities, Inscription Capital, Wedbush Private Capital and American National Bank.
Anyway BNP Paribas enjoys a much greater reputation being classified as one of the 6 most financially solid banks in the world by the rating agency Standard & Poor’s.
The news of its exposure, although relatively small, could push the entire European banking sector to consider the possibility of a strategic investment aimed at increasing the performance of its portfolio.
In this regard, we report an analysis by Grayscale, which highlights how a 5% allocation to Bitcoin could maximize the returns (adjusted for risk) of a balanced portfolio, rather than focusing on bonds and stocks.
Since they were launched in January of this year, Bitcoin spot ETFs have already surpassed $200 billion in cumulative volume, marking an important milestone for the digital finance sector.
It seems that in addition to retail investors, institutional investors are also attracted to this instrument: we will see in the future which will be the next giants to join the ranks of bitcoiners.
Meanwhile, some insights from BlackRock suggest that investments in ETFs are set to expand, with potential imminent allocations from sovereign funds, pensions, and endowments.
Netflow trend of its Bitcoin ETF: 7 consecutive days in the red
While BNP Paribas begins to acquire IBIT shares of BlackRock, the net flows of Bitcoin ETFs in the United States mark negative values day after day, fueling the drop in the price of the cryptocurrency.
According to data from Farside Investors, from April 24th to May 2nd, each trading session on these products ended with more outflow than inflow.
Grayscale still dominates the stage in terms of sales, representing the largest ETF, with an AUM of 17.2 billion dollars.
Blackrock instead, which follows in second place the rival with an AUM of 16.4 billion dollars, has recorded an anomalous trend having marked 0 trades from April 24th to 30th, and a netflow of 36.9 million on May 1st, then returning to 0 the following day.
The situation at the moment seems to be in the hands of sellers, effectively influencing the price action of BTC pushing it towards 52,000 USD.
The short-term future of cryptocurrency, in addition to the internal scenarios of spot ETFs, is also and above all marked by the performance of the global economy at a macro level.
The next interventions of the FED will be crucial in determining the economic policies of the American central bank, and consequently the influence on risk-on assets such as Bitcoin.
Probably the hot season for investments will arrive in the middle of summer or around September/October, as soon as the first interest rate cut is made as a sign of tightening easing.
Meanwhile, Bitcoin spot ETFs, regardless of the market direction, attract very significant trading volumes, totaling over $200 billion.
Since the beginning of the year, the netflow is positive for 11.1 billion dollars, despite the outflow of 17.5 billion from Grayscale.
