Key Points
- Fidelity’s Bitcoin ETF has become the largest single investment in a Bitcoin fund, drawing $40 million from two US financial advisers.
- Despite growing adoption, Bitcoin ETFs are experiencing a slowdown in demand.
Fidelity’s Bitcoin exchange-traded fund (ETF) has set a new record. It has become the largest single investment in a Bitcoin fund, garnering $40 million from two traditional US financial advisers.
Legacy Wealth Management and United Capital Management of Kansas have each invested $20 million in shares of the Fidelity Wise Origin Bitcoin Fund (FBTC). This places them among the fund’s top shareholders.
Financial Advisers’ Investments
Legacy Wealth Management manages more than $359 million in assets, while United Capital Management of Kansas oversees over $436 million. These figures were revealed in recent 13F form filings submitted to the U.S. Securities and Exchange Commission (SEC) for Q1 of 2024.
Investment research firm Fintel’s data shows that Bitcoin (BTC) represents 6% and 5% of the funds’ portfolios, respectively. Eric Balchunas, a Bloomberg analyst, believes these figures indicate a growing adoption among traditional investors.
Concerns and Slowdown
However, the recent disclosures have led some to express concerns about the limited mainstream participation in BTC ETFs. Jim Bianco, founder of Bianco Research, called the first-quarter allocation data a “disappointment.”
Fidelity’s BTC fund is the second-largest Bitcoin ETF in terms of assets under management, with over $10 billion, just behind BlackRock’s iShares Bitcoin Trust (IBIT), which holds more than $18 billion.
Despite the arrival of newcomers and growing adoption among traditional investors, Bitcoin ETFs are experiencing a slowdown in demand. CryptoQuant CEO Ki Young Ju noted that the demand for BTC funds has stagnated since its peak in March. On April 15, Bitcoin ETFs experienced net outflows of $36.7 million.
According to Farside Investors, only Grayscale and BlackRock recorded positive flows on April 12 and April 15, while all other funds saw outflows.