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Is the swarm of institutional companies a speculative hype or the return of Bitcoin’s value?
Original title: “Which traditional Wall Street financial institutions have positions in Bitcoin? 》
Written by: BlockBeats
On January 4, 2021, after the price of Bitcoin jumped over $34,000, the Financial Times stated that “cryptocurrencies are becoming more integrated into the financial system.”
This is a landmark day. After 8 years, the famous international financial media “Financial Times” announced to his 450,000 readers that they had changed their views on Bitcoin, because when the price of Bitcoin was $138 in 2013, the “Financial Times” made the headlines It was written in the news that “Goining it buying frenzy sends virtual currency on way to becoming next bubble (the crazy buying wave makes virtual currency the next bubble)”.
“Financial Times” is actually a summary of the voices of traditional institutions on Wall Street.
Regarding this round of bull market, there is basically a consensus: this round of bitcoin market is an “institutional bull”, and institutions have already voted for their choices with the money in their hands, buying bitcoins as their own asset allocation. The entry of institutions superimposed on the rich channels for retail purchases of Bitcoin has allowed Bitcoin to continuously set new highs. Its market value once surpassed Facebook, ranking seventh in the global list of valuable assets, closely following Alphabet A (the parent company of Google) and Special After Sla.
So which traditional funds and institutions hold Bitcoin?
Rhythm BlockBeats counts companies and institutions that have publicly disclosed that they hold Bitcoin. Due to restrictions on the financial markets of various countries and the regulatory laws and regulations, companies that purchase Bitcoin are divided into direct purchase and indirect purchase.
Institutions that buy Bitcoin directly
On January 4, 2021, alternative investment company SkyBridge Capital announced the launch of the Bitcoin fund “SkyBridge Bitcoin Fund LP”. In order to start the fund, Skybridge Capital and its affiliates have invested US$25.3 million. At the same time, on January 4, the Bitcoin fund positions invested by Tianqiao Capital on behalf of its flagship funds (flagship funds) in November and December 2020 were worth 310 million US dollars.
According to official Tianqiao Capital, the Tianqiao Bitcoin Fund will have Fidelity Digital Assets as the custodian of Bitcoin, and Ernst & Young as the auditor. The fund only charges 0.75% of management fees and no incentive fees. You can subscribe to the fund directly through the official website. The minimum investment amount is US$50,000.
According to Rhythm BlockBeats, in 2017, Skybridge Capital planned to sell its majority stake to HNA Capital (US). If the acquisition is completed, HNA Capital will own 80% of Tianqiao Capital. In 2018, due to the obstruction of the US Foreign Investment Review Committee (CFIUS), Tianqiao Capital abandoned its plan to merge with HNA Capital.
Miller Value Partners
Mvp 1 fund is a hedge fund operated by Miller Value Partners with approximately $41.9 million in assets, of which management owns 79% of the fund. Bill Miller, the founder, chairman and chief investment officer of Miller Value Partners, stated in an open letter of market analysis in the fourth quarter of 2020 that in an inflationary environment, there will be more and more institutional funds to buy bitcoin.
Bill Miller previously managed funds at Legg Mason, and the funds under his management exceeded the S&P 500 index for 15 consecutive years from 1990 to 2005. In 1990, Miller’s fund held half of its funds in AOL (20%), Dell (20%), and Fannie Mae (10%). Miller’s second large-scale investment in a single target occurred in 2017, and the target was Bitcoin.
In an interview, Miller stated that at the end of 2017, the value of Bitcoin accounted for half of the Mvp 1 fund. Of course, the main reason is the sharp rise in Bitcoin. Public information shows that in 2014, Miller spent 1% of his net assets to buy Bitcoin. At the same time, Miller continued to increase positions in 2015. According to information disclosed by Miller on the podcast, the average price of bitcoins purchased in 2014 and 2015 was $350.
At present, the minimum investment amount of Mvp 1 fund is 1 million US dollars.
Rhythm Note: At present, Mvp 1 fund cannot be queried through Miller Value Partners. Part of the data comes from Private FUND Data.
On December 11, 2020, one of the five largest life insurance companies in the United States, MassMutual, purchased $100 million worth of Bitcoin for its general insurance account through the New York Digital Investment Group (NYDIG). This investment for MassMutual is only 0.04% of its investment account funds (approximately US$235 billion). MassMutual currently holds a minority stake of $5 million in NYDIG.
Tudor Investment Corp
Tudor Investment Corp is an asset management company founded by billionaire Paul Tudor Jones. In May 2020, Paul Tudor Jones stated that the bitcoin assets he purchased accounted for 1%-2% of his investment management scale. Tudor Investment’s asset management scale is approximately US$38.3 billion, of which Tudor BVI Global Fund accounts for US$21.5 billion. Jones purchased Bitcoin through Tudor BVI Global Fund.
Currently, the minimum investment to participate in the Tudor BVI Global Fund is 10 million US dollars.
According to data from Bitcoin Treasuries, there are currently 16 listed companies in the world that have announced their holdings of Bitcoin, with a total holding of approximately 115,300, accounting for 0.54% of the total Bitcoin.
MicroStrategy, the listed company that has bought the most bitcoins, is a business intelligence and mobile software company that has been established for 32 years. Before the Internet bubble burst in 2000, MicroStrategy’s stock price was as high as $3,330 per share. In the next 20 years, the stock price of this former star company only touched $226. Until August 2020, MicroStrategy invested $250 million in Bitcoin as an inventory reserve asset on the grounds of diminishing cash returns, a weak U.S. dollar, and other global macroeconomic factors. As a result, the stock price hit a new high since 2001.
Subsequently, with the skyrocketing of Bitcoin, the gains from holding Bitcoin stimulated MicroStrategy’s stock price to continue to rise. After the performance rose, MicroStrategy raised US$650 million through high-level convertible bonds and bought all bitcoins. Some investors describe this as a “perpetual motion machine”. When a listed company buys bitcoin, the price of bitcoin rises. The rise in bitcoin price increases the company’s income, and the increase in company income causes the company’s stock price to rise.
Of course, this scenario does not only happen with cryptocurrencies. In 2020, the rising logic of liquor funds and technology stocks will be similar.
Institutions that buy Bitcoin indirectly
At present, it is easier for ordinary investors, private equity funds, and public funds on the market to purchase bitcoin products indirectly, which is the “Grayscale Bitcoin Trust” launched by Grayscale Investment. This is a bitcoin fund launched in the form of trust, which can accept physical (ie bitcoin) or cash purchases, and is held in the form of GBTC. The lock-up period is six months. It can be bought and sold through the OTC Market when it expires.
Previously in 2019, a QDII fund management product “Bank Global Strategic Securities Investment Fund (FOF)” issued by the Bank of China Fund also purchased 13,000 shares of GBTC worth 1.35 million yuan.
Rhythm BlockBeats has compiled a list of institutions that have recently disclosed that they still hold GBTC:
Three Arrows Capital, which holds the most GBTC, is a hedge fund established in Singapore in 2012. It mainly invests in infrastructure in the cryptocurrency field, decentralized financial projects and derivatives platforms. At the same time, Three Arrows Capital is also a shareholder of BlockFi, the second largest GBTC institution. BlockFi, an encrypted asset lending platform, completed a USD 30 million Series B financing in February 2020. According to BlockFi CEO Zac Prince, BlockFi will be available in the second half of 2021 at the earliest.
In addition, ARK, a fund managed by Catherine Wood, known as the “Female Buffett”, invested in GBTC as early as 2015, and its “Next Generation Internet ETF” ARKW increased its holdings of 780,000 shares of GBTC in the most recent month. , Worth more than 35 million US dollars. ARKW has ranked sixth among global ETFs with a total investment return of 555.79% in the past five years. Among them, GBTC is its third largest stock, accounting for 4.73% of its total funds.
The hedge fund Horizon Kinetics holds GBTC shares behind ARK. Five trust funds (KINETICS PORTFOLIOS TRUST) and a closed-end fund (RENN Fund) under Horizon Kinetics all hold GBTC, holding a total of 5.18 million GBTC, valued at approximately US$230 million. In addition to purchasing GBTC, Horizon Kinetics also participates in Bitcoin mining, hosting the mining machines at the Core Scientific mine, which has a 450 MW power load.
It is worth noting that the investment company “Rothschild Investment Corp” under the well-known family Rothschild family also indirectly holds Bitcoin through holding GBTC.
In 2020, more and more institutions and enterprises begin to accept and purchase Bitcoin. Bitcoin’s influence on a global scale is also increasing. However, the current global influence of Bitcoin is still not comparable to that of gold. Calculated according to the value of global gold reserves, the price of a bitcoin needs to rise to 380,000 US dollars to be equivalent to gold.
The swarm of institutional companies has made it difficult to judge whether this is an inter-institutional hype or the return of Bitcoin’s value. There is never a shortage of perpetual motion machines in the capital market, just the length of the duration.
Bitcoin is like a social experiment, and every company that buys Bitcoin may have different ideas. Every business is just using the money in its pocket to choose the world it wants.