European Banking Giant BNP Paribas Ventures into Bitcoin ETF Investment

Updated: 13 August 2024

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In a significant development reported through a 13F filing with the U.S. Securities and Exchange Commission (SEC), BNP Paribas, Europe’s second-largest bank by assets, has made a notable entry into cryptocurrency investments. The multinational bank acquired 1,030 shares of the BlackRock iShares Bitcoin Trust (IBIT) during the first quarter of 2024. Each share was purchased at a price of $40.47, totaling an investment of $41,684.10, which interestingly amounts to less than the value of a single Bitcoin at current market prices.

BNP Paribas’ Strategic Investment in Bitcoin ETFs

This move by BNP Paribas is seen as a cautious yet pioneering step into the realm of spot Bitcoin ETFs, highlighting a growing interest from traditional financial institutions in such investment vehicles. The transaction is particularly noteworthy as it represents one of the initial instances where a major bank has invested in a spot Bitcoin ETF, somewhat affirming the hypothesis that institutional investors are beginning to consider Bitcoin exchange-traded funds as a viable investment option.

Institutional investment managers, including those from foreign banks like BNP Paribas who engage in transactions in the U.S. such as purchasing American ETFs, are mandated to disclose their quarterly investments through 13F reports to the SEC. These filings are required for entities managing assets worth at least $100 million and must be submitted within 45 days following the end of a quarter.

Exploring Institutional Interest in Cryptocurrency Investments

Despite this move, the overall market sentiment towards Bitcoin ETFs has been mixed. A report from Goldman Sachs released shortly after the U.S. SEC approved several spot Bitcoin ETFs in January indicated that immediate market uptake and interest from institutional investors might not materialize swiftly. This view is supported by Matt Hougan, CIO of crypto index fund manager Bitwise, who noted that most professional investors are still unable to invest in Bitcoin ETFs, although he anticipates this will change gradually over the next couple of years following extensive individual due diligence processes.

Since their introduction in January, Bitcoin ETFs have attracted $11.2 billion in net inflows, according to data from Farside Investors, even as they observed more than $17.4 billion in outflows from the Grayscale Bitcoin Trust (GBTC). Additionally, recent trends have shown substantial outflows from Bitcoin ETFs, including over $563 million in net outflows in just one day, influenced partly by the U.S. Federal Reserve’s decision to maintain interest rates, which has made investors wary of riskier assets such as stocks and cryptocurrencies.

This cautious foray into Bitcoin ETFs marks a significant shift in stance for BNP Paribas. Just in September 2022, Sandro Pierri, head of BNP Paribas Asset Management, expressed the firm’s disinterest in cryptocurrencies, citing a lack of substantial client demand for such investments. This recent investment suggests a changing perspective within the bank regarding digital asset engagements.

JUST IN: 🇪🇺 Europe's second-biggest bank BNP Paribas bought BlackRock spot #Bitcoin ETF shares. pic.twitter.com/Am9JV83MeM

— Radar🚨 (@RadarHits) May 2, 2024

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