Global investment funds now hold more than $43 billion worth of bitcoin on behalf of their clients, according to a report from Financial News. Corporate bitcoin holdings, meanwhile, have reached a total of $6.5 billion.
Anatoly Crachilov, CEO of Nickel Digital — the firm that supplied the data behind the report — told Financial Times that the inclusion of bitcoin in the portfolios of leading global asset managers was “a very important endorsement for bitcoin’s emerging functionality of the hedge against inflation.”
For instance, global asset manager Paul Tudor Jones has recently been vocal about including bitcoin in his investment portfolio. Yesterday, Jones highlighted bitcoin’s strengths as an asset, sharing that he looks at it as a portfolio diversifier to protect his wealth over time.
Similarly, as more institutional investors open up to bitcoin exposure, banks and asset managers seek to capitalize on the movement. Goldman Sachs, for example, has been quite active in the bitcoin space. The investment bank launched a derivatives product based on the price of bitcoin in April and announced it would soon offer bitcoin investment vehicles to its private wealth clients in March.
Increased institutional adoption can bring benefits to bitcoin and its investment ecosystem, Crachilov told Financial Times.
“Increasing allocations by large-scale institutional investors and corporate players is expected to lead to a reduction of [bitcoin’s] volatility over time,” he said, due to a “longer-term, stickier type of capital brought by those investors.”
Crachilov later added that increased bitcoin exposure by institutional investors would also result in a “much larger liquidity pool” of the ecosystem.
Data from Nickel Digital also showed that among the present-day investment funds that hold bitcoin, three-fifths of the total are based in North America. Furthermore, many companies have added bitcoin to their balance sheets, with corporate bitcoin holdings reaching over $6.5 billion — a number that 81% of European institutional investors and wealth managers surveyed by Nickel expects to see grow.