Fidelity’s Bitcoin exchange-traded fund (ETF) recently made headlines by attracting $40 million from two U.S. financial advisers. This investment marks the largest single investment in a Bitcoin fund to date.
Legacy Wealth Management and United Capital Management of Kansas, two established financial advisers, each invested $20 million in shares of the Fidelity Wise Origin Bitcoin Fund (FBTC). This move positions them among the fund’s top shareholders.
Legacy Wealth Management manages over $359 million in assets, while United Capital Management of Kansas oversees more than $436 million. These numbers were disclosed in recent 13F form filings submitted to the U.S. Securities and Exchange Commission (SEC) for the first quarter of 2024.
Growing Bitcoin Adoption
Data from investment research firm Fintel shows that Bitcoin constitutes 6% and 5% of Legacy Wealth Management’s and United Capital Management of Kansas’ portfolios, respectively. Bloomberg analyst Eric Balchunas sees this as a sign of increasing adoption among traditional investors.
While some celebrate the growing adoption, concerns have been raised about limited mainstream participation in BTC ETFs. Jim Bianco, founder of Bianco Research, expressed disappointment over the first-quarter allocation data, noting that unrealized gains are decreasing as Bitcoin prices fluctuate.
Fidelity’s BTC Fund in Perspective
Fidelity’s BTC fund, currently the second-largest Bitcoin ETF in terms of assets under management, holds over $10 billion. It follows closely behind BlackRock’s iShares Bitcoin Trust (IBIT), which boasts over $18 billion in assets.
Despite the influx of traditional investors, Bitcoin ETFs are experiencing a slowdown in demand. CryptoQuant CEO Ki Young Ju observed that the demand for BTC funds has stagnated since its peak in March. On April 15, Bitcoin ETFs saw net outflows of $36.7 million, with only Grayscale and BlackRock recording positive flows on April 12 and April 15.
