BNP Paribas, Europe’s 2nd Largest Bank, Acquires Bitcoin ETF Shares from BlackRock: Unveiling BTC Investment Strategy

• BNP Paribas, the second-largest bank in Europe, has made its first known investment in Bitcoin via BlackRock’s iShares Bitcoin Trust (IBIT).
• The bank purchased 1,030 IBIT shares in Q1 2024, marking a significant shift in its stance towards cryptocurrencies.
• Despite recent outflows from Bitcoin ETFs, this move by BNP Paribas may signal a growing interest from institutional investors.

BNP Paribas, Europe’s second-largest bank, has made its first foray into Bitcoin investment, purchasing shares in BlackRock’s iShares Bitcoin Trust. This marks a significant shift in the bank’s stance towards cryptocurrencies.

BNP Paribas Dips Its Toes into Bitcoin Investment

According to a recent 13F filing with the U.S. Securities and Exchange Commission (SEC), BNP Paribas purchased 1,030 IBIT shares in the first quarter of 2024 at $40.47 a share, for a total of $41,684.10. While this investment represents a miniscule portion of the bank’s overall portfolio, it is noteworthy as one of the first verified instances of a major financial institution investing in a spot Bitcoin ETF.

Significance of the Move

This move by BNP Paribas could be seen as a validation of the thesis that institutional investors would be drawn to Bitcoin exchange-traded funds. Despite a Goldman Sachs report suggesting that demand from institutional investors may not be immediate, the bank’s investment indicates a shift in perspective. Matt Hougan, CIO of crypto index fund manager Bitwise, has noted that most professional investors are still unable to buy Bitcoin ETFs, but this is likely to change over the next two years.

Bitcoin ETFs and Market Trends

Since their launch in January, Bitcoin ETFs have attracted $11.2 billion in net inflows, despite over $17.4 billion in outflows from the Grayscale Bitcoin Trust (GBTC). However, recent days have seen consistent outflows from Bitcoin ETFs, largely due to the U.S. Federal Reserve’s decision to maintain interest rates, causing investors to shy away from risk assets like stocks and crypto.

BNP Paribas’ Changing Stance on Crypto

BNP Paribas’ decision to invest in Bitcoin ETFs represents a significant shift from its previous stance. In September 2022, Sandro Pierri, head of BNP Paribas Asset Management, stated that the firm was not involved in cryptocurrencies and had no intention to be. However, this recent investment suggests a change in strategy and possibly a growing interest in crypto from its client base.

Conclusion

BNP Paribas’ investment in Bitcoin ETFs, while small, is significant as it marks one of the first instances of a major financial institution investing in a spot Bitcoin ETF. This could signal a growing interest from institutional investors in cryptocurrencies, despite recent market volatility. As more institutions follow suit, the landscape of crypto investment could see a major shift.