Goldman Sachs and Morgan Stanley bought over $600 million in spot Bitcoin ETFs in Q2

Author: Suzanne McGee, Reuters; Compiler: Wuzhu, Golden Finance

Goldman Sachs and Morgan Stanley (MS.N) bought more than $600 million of spot bitcoin exchange-traded funds (ETFs) in the second quarter, regulatory filings showed on Wednesday.

The two banks join a group of hedge funds and financial advisers that will begin trading in the products in January 2024.

Goldman Sachs said in its quarterly disclosure filing with the U.S. Securities and Exchange Commission that it has spent about $418 million to acquire several recently launched ETFs tied to the spot price of bitcoin.

Most of that money reflects Goldman's nearly 7 million shares in iShares Bitcoin Trust (IBIT.O), valued at about $238 million as of the end of the quarter on June 30. Goldman also holds large stakes in Fidelity Wise Origin Bitcoin ETF and Invesco Galaxy Bitcoin ETF (BTCO.Z), and smaller positions in several other bitcoin ETFs launched in January.

Morgan Stanley also favors BlackRock's iShares Bitcoin ETF, disclosing a 5.5 million-share position valued at $188 million as of June 30.The bank also disclosed smaller holdings in Ark 21Shares Bitcoin ETF (ARKB.Z) and Grayscale Bitcoin Trust (GBTC.P).

13F filings are one of the few ways to get a glimpse into institutional investors’ holdings at the end of each quarter. Positions may not reveal current holdings.

While the latest round of filings suggests that institutional involvement in bitcoin ETFs may be growing, ETF issuers and analysts say the products have been dominated by individual investors so far.

The banks could not be reached to ask whether their positions were purchased on behalf of clients or for each firm’s own account.

Some hedge funds that took positions in bitcoin ETFs earlier this year adjusted their holdings in the second quarter, the filings show.

New York-based Hunting Hill Global Capital cut its positions in Grayscale and Fidelity ETFs but held an $18.32 million stake in the Bitwise Bitcoin ETF (BITB.P) as of June 30 and took a new $25.6 million position in BlackRock’s ETF.

Hunting Hill founder and CEO Adam Guren said his firm is an active trader in bitcoin products. “At any given time, our trading activity can change, and therefore our positions can change,” he said.

New York-based Millennium Management LLC disclosed that it cut its positions in three of the five bitcoin ETFs it held in the first quarter, while keeping its position in the Ark 21Shares ETF unchanged and increasing its holdings in the Bitwise product to nearly 2 million shares from about 1.2 million at the end of the first quarter.

Overall, the hedge fund had about $1.15 billion invested in bitcoin ETFs at the end of the second quarter, down from $2 billion disclosed at the end of the first quarter. A spokesman for the company declined to comment.

Bitcoin prices fell 12% during the quarter.