Key Points
- BNP Paribas, a European banking giant, shows exposure to Bitcoin ETFs.
- The bank’s move into cryptocurrency began in 2022 with a partnership with Metaco for crypto custody.
BNP Paribas, a leading European bank, has reported exposure to Bitcoin ETFs. Though the investment is small compared to the bank’s $600 billion in assets under management (AUM), it signifies the bank’s initial move into Bitcoin investments.
In 2022, BNP Paribas began its foray into the world of cryptocurrency through a strategic partnership with Metaco. This collaboration aimed to create a crypto custody service that would facilitate the issuance, transfer, and secure storage of regulated digital assets for clients.
BNP Paribas’s Strategic Investments
Since partnering with Metaco, BNP Paribas has continued to invest strategically in the industry, assisting startups in navigating the rapidly expanding digital economy.
In a notable move, the bank, in conjunction with Goldman Sachs, led a significant $100 million investment round for Fnality International in the previous year. Fnality International is a company that utilizes blockchain technology for secure and efficient cash transfers between financial institutions.
BNP Paribas’s recent investment in spot Bitcoin ETFs has occurred amidst a decline in institutional adoption of these funds. On a particular Thursday, the total outflows for the investment vehicle reached $563.7 million, the highest single-day amount since its inception in January.
Fidelity’s FBTC led the outflows, with over $191 million leaving the fund. Grayscale’s GBTC followed closely with a net outflow of $167.3 million.
Institutional Debate on Bitcoin ETFs
The low institutional adoption of Bitcoin ETFs has sparked significant discussions within the crypto community. Jim Bianco from Bianco Research posits that institutional investors are hesitant to invest in Bitcoin ETFs due to their perceived lack of attractiveness.
In contrast, Eric Balchunas, a senior ETF analyst at Bloomberg, anticipates widespread adoption of these products once investment advisors begin reporting their 13F filings. Balchunas noted that approximately 150 advisors across the country have already reported owning a spot ETF.
He predicts a surge in institutional advisors opting for Bitcoin ETFs, with over 500 advisors expected to report ownership by May 15th. Balchunas believes this increased interest will set new records for the first three months of the market, indicating a potential turning point in the institutional adoption of Bitcoin ETFs.
