Fidelity’s Bitcoin exchange-traded fund (ETF) has reached a significant milestone as it secures a record-breaking $40 million investment from two prominent traditional financial advisers in the United States.
According to Bloomberg analyst Eric Balchunas, Legacy Wealth Management and United Capital Management of Kansas, two financial advisers, have recently invested $20 million each in shares of the Fidelity Wise Origin Bitcoin Fund (FBTC), making them top shareholders of the fund.
Legacy Wealth Management manages assets worth over $359 million, while United Capital Management of Kansas oversees more than $436 million. These figures were disclosed in the recent 13F form filings submitted by asset managers to the U.S. Securities and Exchange Commission (SEC) for the first quarter of 2024.
Source: Eric Balchunas
Data from investment research firm Fintel reveals that Bitcoin (BTC) represents 6% and 5% of the portfolios of Legacy Wealth Management and United Capital Management of Kansas, respectively.
Bloomberg’s Balchunas believes these numbers indicate a growing acceptance of Bitcoin among traditional investors. “This is a classic Baby Boomer move,” he commented, referring to United Capital Management of Kansas.
He added, “It’s a great sign for those hoping for long-term adoption and a complete nightmare for the skeptics who doubted the potential of Bitcoin.”
However, the recent disclosures have raised concerns about the limited mainstream participation in BTC ETFs.
Jim Bianco, the founder of macro research firm Bianco Research, expressed disappointment with the allocation data for the first quarter. He stated, “The gains that investors were hoping for are diminishing rapidly,” referring to the difference between ETF investor gains and current Bitcoin prices.
Fidelity’s BTC fund currently holds over $10 billion in assets under management, making it the second-largest Bitcoin ETF. It is closely behind BlackRock’s iShares Bitcoin Trust (IBIT), which has over $18 billion.
Despite the growing adoption among traditional investors, Bitcoin ETFs are experiencing a slowdown in demand. Ki Young Ju, the CEO of CryptoQuant, noted that the demand for BTC funds has stagnated since reaching its peak in March.
On April 15, Bitcoin ETFs experienced net outflows of $36.7 million. According to Farside Investors, only Grayscale and BlackRock recorded positive flows on April 12 and April 15, while all other funds saw outflows.
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