13F season has arrived for bitcoin investors, as this quarter marks the first time we will see which investment managers have embraced the digital asset. With the launch of bitcoin spot ETFs in January, 13F filings now include information on U.S.-traded stocks and options, as well as bitcoin ETFs held by institutional investment managers with at least $100 million in qualifying assets. However, it’s important to remember that 13F filings are just a snapshot of holdings as they stood on the last day of the quarter, and may not reflect any recent buying or selling activity.
Various types of investment managers, including hedge funds, mutual funds, index funds, and large corporations like Berkshire Hathaway, are required to submit 13F filings. Hedge funds often take on more risk for higher returns, while mutual funds gather resources from multiple investors to invest in a diversified portfolio. Index funds track specific market indices, providing stable market exposure. Corporate giants like Berkshire Hathaway have diverse investment strategies that range from stock picking to broad diversification. It’s crucial to understand that not all 13F filings signal true investment conviction.
Market makers and high-frequency trading firms like Citadel Securities, Susquehanna International Group, and Virtu Financial are also required to file 13Fs, but their holdings often reflect high-volume trading rather than a long-term belief in the assets. Banks may list Bitcoin ETFs in their filings, but this could be more related to their role as market makers or Authorized Participants for the ETFs, aligning the ETF’s price with its underlying assets by creating or redeeming shares as needed. However, some bank disclosures may include shares held by private wealth clients, which could signal a bullish outlook.
The largest position in either the BlackRock or Fidelity bitcoin ETFs disclosed by an actively managed fund so far was a $40 million position by Yong Rong Asset Management, a Hong Kong-based alternative investment fund. Context Capital Management, a La Jolla-based fund, disclosed that 50% of its equity position was allocated to the BlackRock ETF, making it the biggest position as a percent of a fund’s equity portfolio. The deadline to file for the first quarter is May 15, providing investors with insights into which investment managers have embraced bitcoin and other securities in their portfolios.
As 13F season progresses, investors will have the opportunity to analyze filings from various types of investment managers to understand their investment strategies and convictions. While some filings may indicate a bullish outlook on Bitcoin ETFs, it’s important to consider the nature of the filer and their investment approach. Market makers and high-frequency trading firms may focus on capturing trading volume rather than expressing long-term beliefs, while banks may list Bitcoin ETFs for market mechanics purposes rather than making a bet on Bitcoin. Overall, 13F filings offer valuable insights into the holdings of institutional investment managers and their views on various securities.
