• European banking giant BNP Paribas acquired 1,030 units of BlackRock’s iShares Bitcoin Trust (IBIT), representing an investment of approximately $41,684
• The investment marks BNP Paribas’ initial step into exploring Bitcoin (BTC) investments, despite being a relatively small amount given the bank’s extensive portfolio
• While institutional adoption of spot Bitcoin ETFs has declined recently, with the largest single-day outflow on May 1st, analysts expect a surge in advisors opting for these products by mid-May
The second-largest European bank, BNP Paribas, has made its first move into Bitcoin by acquiring shares of a spot Bitcoin exchange-traded fund (ETF). This marks an important step as the bank begins to explore crypto investments.
BNP Paribas Acquires Shares in Bitcoin ETF
According to a recent SEC filing, BNP Paribas purchased 1,030 units of BlackRock’s iShares Bitcoin Trust (IBIT). This represents an investment of approximately $41,684.
While a modest amount compared to BNP’s $600 billion in assets under management, this initial purchase signals the bank dipping its toes into Bitcoin. It comes on the heels of BNP’s push into crypto services over the past couple years.
BNP Paribas’ Crypto Journey So Far
In 2022, BNP partnered with Metaco to develop crypto custody solutions for regulated digital assets. This allows BNP to facilitate the issuance, transfer, and secure storage of crypto for clients.
BNP has also strategically invested in crypto startups helping build the digital economy. Last year, BNP and Goldman Sachs co-led a $100 million funding round for Fnality International. Fnality uses blockchain to enable efficient cash transfers between financial institutions.
Institutional Interest in Bitcoin ETFs Debated
BNP’s Bitcoin ETF purchase coincides with declining institutional interest in these funds. On Thursday, total outflows hit $56.37 million – the highest single-day amount yet.
Fidelity’s FBTC saw over $191 million exit, while Grayscale’s GBTC bled $1.673 million. This has fueled debate around institutional adoption of Bitcoin ETFs.
Some, like Jim Bianco, believe institutional investors see the funds as unattractive. But Bloomberg‘s Eric Balchunas expects advisors to report major ETF ownership on upcoming 13F filings, signaling a potential turning point.
As advisors increasingly opt for the convenience of a Bitcoin ETF, Balchunas predicts hundreds more will disclose ownership this month. If so, it could drive record inflows over 2022’s first quarter and kickstart wider institutional adoption.
