Fidelity’s Bitcoin ETF Attracts Record $40M Investment from Advisers

Fidelity’s Bitcoin exchange-traded fund (ETF) has made history by becoming the largest single investment in a Bitcoin fund. Two traditional US financial advisers, Legacy Wealth Management and United Capital Management of Kansas, have recently invested $20 million each in shares of Fidelity’s Wise Origin Bitcoin Fund (FBTC), making them top shareholders of the fund. Legacy Wealth Management manages over $359 million in assets, while United Capital Management of Kansas manages over $436 million. This information was disclosed in 13F form filings submitted to the US Securities and Exchange Commission (SEC) for the first quarter of 2024. According to Fintel, Bitcoin represents 6% and 5% of the funds’ portfolios, respectively, indicating a growing adoption among traditional investors.

These recent investments in the Bitcoin ETF have led some to express concerns about limited mainstream participation. Jim Bianco, founder of macro research firm Bianco Research, described the first-quarter allocation data as a “disappointment” and noted that unrealized gains are shrinking quickly compared to current Bitcoin prices. Despite these concerns, Fidelity’s BTC fund is the second-largest Bitcoin ETF in terms of assets under management, with over $10 billion at the time of writing. It is second only to BlackRock’s iShares Bitcoin Trust (IBIT), which holds more than $18 billion.

Bitcoin ETFs are currently experiencing a slowdown in demand. The CEO of CryptoQuant, Ki Young Ju, noted that the demand for BTC funds has stagnated since its peak in March. On April 15, Bitcoin ETFs recorded net outflows of $36.7 million. Only Grayscale and BlackRock had positive flows on April 12 and April 15, while all other funds saw outflows. This decline in demand raises concerns about the future of Bitcoin ETFs.

Despite these challenges, the investments made by Legacy Wealth Management and United Capital Management of Kansas are seen as a significant step towards the long-term adoption of Bitcoin by traditional investors. Bloomberg analyst Eric Balchunas views these investments as a positive sign and believes they indicate a growing interest among boomers in Bitcoin. Not everyone shares this optimism, and some express concerns about the limited mainstream participation in BTC ETFs.

Fidelity’s Bitcoin ETF has attracted $40 million in investments from two traditional US financial advisers, making it the largest single investment in a Bitcoin fund. These investments reflect a growing adoption of Bitcoin by traditional investors, but there are concerns about the limited mainstream participation in Bitcoin ETFs. Despite being the second-largest Bitcoin ETF in terms of assets under management, Bitcoin ETFs are experiencing a slowdown in demand. Only time will tell how this trend develops and whether Bitcoin ETFs can gain broader acceptance among mainstream investors.