Europe’s fourth largest hedge fund put nearly $500M in Bitcoin ETFs — Filing

According to public disclosures filed on Aug. 5, Capula Management, Europe’s fourth-largest hedge fund, invested nearly $500 million in Bitcoin (BTC) exchange-traded funds. 

The hedge fund, which is based in the United Kingdom and manages upward of $30 billion in investor assets, holds shares in Fidelity Wise Origin Bitcoin Fund (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT).

According to the filing, Capula owns shares worth more than $464 million in total, reflecting its portfolio as of June 30. The filings do not indicate that Capula owns any other crypto assets.

The severe market drawdown that started in July has reversed inflows into BTC ETFs, which saw nearly $175 million in net outflows between July 31 and Aug. 2, Morningstar Inc., a fund researcher, told Cointelegraph.

BlackRock’s IBIT and Fidelity’s FBTC are emerging as blue chips among BTC ETFs, with strong uptake among professional financial advisers, Roxanna Islam, head of sector and industry research at VettaFi—a fund researcher—told Cointelegraph.

Other hedge funds are also reporting sizable positions in Bitcoin ETFs. Millennium Management in May disclosed BTC ETF holdings worth nearly $2 billion, as well as a variety of Bitcoin-related assets.

Since first listing in January, Bitcoin ETFs have pulled upwards of $50 billion in net investor inflows. Ether (ETH) ETFs followed in June and now command approximately $8 billion in assets.

The ETF structure offers benefits—including low fees, robust investor protections, and easy accounting—that make crypto more palatable to mainstream investors. Morgan Stanely, the largest wealth manager in the United States, has reportedly started allowing its 15,000 financial advisers to recommend Bitcoin to clients.

In the US alone, ETFs represent a $9 trillion market, according to Cerulli Associates, a fund researcher.

On Aug. 5, BTC ETFs saw some of the highest-ever trading volumes, with upward of $1 billion worth of shares changing hands within minutes of the market’s opening.

“[I]t’s unlikely that significant players will invest amid high volatility and unpredictable prices,” Markus Thielen, founder of 10x Research, told Cointelegraph.