BNP Paribas Reverses Stance On Crypto, Invests In BlackRock's Spot Bitcoin ETF

Zinger Key Points
  • This investment signifies one of the first times a major financial institution has entered the spot Bitcoin ETF market.
  • The involvement of traditional banks like BNP Paribas could signal a shift in institutional attitudes towards cryptocurrencies.

BNP Paribas, a multinational investment bank and one of the largest financial institutions in Europe, has made a landmark move by purchasing shares in BlackRock’s iShares Bitcoin Trust IBIT, according to an SEC filing.

What Happened: The 13F report filed with the U.S. Securities and Exchange Commission (SEC) reveals that BNP Paribas acquired 1,030 IBIT shares in the first quarter of 2024, at a price of $40.47 per share.

While the total investment amounts to $41,684.10, it represents a fraction of a single Bitcoin BTC/USD at current prices.

This investment by Europe’s second-largest bank by assets is particularly notable as it represents one of the first instances where a major financial institution has invested in a spot Bitcoin ETF.

This move is seen as an endorsement of the growing belief that Bitcoin ETFs would attract institutional investors.

The timing of BNP Paribas’s entry into Bitcoin ETFs is intriguing, especially considering the bank’s previously cautious stance towards cryptocurrencies.

In September 2022, Sandro Pierri, head of BNP Paribas Asset Management, was quoted saying the firm was not involved in cryptocurrencies and had no plans to engage with them due to a lack of significant client interest.

This recent investment marks a notable pivot in strategy.

Despite the excitement around Bitcoin ETFs following their approval by the SEC in January, a Goldman Sachs report indicated that the adoption by institutional investors might not be immediate.

Also Read: BlackRock Anticipates Renewed Institutional Interest In Bitcoin Spot ETFs

Matt Hougan, CIO of crypto index fund manager Bitwise, supported this view by noting that professional investors still face hurdles in purchasing Bitcoin ETFs, a situation expected to evolve with comprehensive due diligence over the next couple of years.

Since their launch, Bitcoin ETFs have seen substantial activity with $11.2 billion in net inflows, contrasting sharply with $17.4 billion in outflows from the Grayscale Bitcoin Trust GBTC, according to Farside Investors.

However, recent trends have shown significant outflows, including over $563 million just yesterday, amid decisions by the U.S. Federal Reserve to maintain interest rates, which has made investors wary of riskier assets like cryptocurrencies.

As the digital assets market continues to mature, the participation of traditional financial institutions like BNP Paribas could signal a broader shift in the sector.

What’s Next: This evolving landscape will be a key topic of discussion at Benzinga’s upcoming Future of Digital Assets event on Nov. 19, where industry leaders will converge to discuss the integration of traditional finance with digital asset investments and the future of regulatory frameworks in this dynamic space.

Read Next: Bitcoin Spot ETFs Experience Record $564M Outflows, Expert Attributes It To ‘Combination’ Of Forces

Photo: Wikimedia

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