Bracebridge Capital Becomes Largest Bitcoin ETF Holder, Investing $380 Million In All-In Bet

Last week, the US spot Bitcoin ETF market experienced a notable shift in investor sentiment. Positive inflows were reported, breaking a streak of outflows that had persisted for almost a month. The week concluded with a significant $116 million positive inflows, indicative of growing interest in the newly approved index funds.

Notably, a new player entered the market and made substantial investments, quickly becoming one of the largest holders of Bitcoin ETFs.

Bracebridge Capital Nets Major ETF Holdings

Bracebridge Capital, a Boston-based hedge fund, reported owning $262 million worth of Ark Invest’s ARKB ETF. Additionally, they emerged as the largest owner of Blackrock’s IBIT with an investment of $81 million. 

Bracebridge Capital also holds $20 million of Grayscale’s Bitcoin Trust (GBTC), which experienced negative outflows of $103 million during the same period. Bloomberg ETF expert Eric Balchunas described Bracebridge Capital’s investment as a “wild” move, noting the firm’s significant acquisitions. 

It is also worth mentioning the growing number of holders for each ETF, with IBIT boasting 250 holders in the first quarter alone, which is notable for a recently launched product.

Bitcoin ETF Outflows In Hong Kong Persist

In contrast, the Bitcoin ETF market in Hong Kong has been experiencing slower but consistent outflows. On Friday, May 10, 2024, there was an outflow of $6.3 million, followed by an $18.5 million outflow on Monday, May 13, 2024. However, it should be noted that Bosera and Harvest are yet to report for Monday, according to Farside data. 

These outflows come amidst rumors that Bitcoin ETFs listed in Hong Kong could soon become accessible to investors from mainland China.

As previously reported, Richard Byworth, Managing Partner at SyzCapital, sparked speculation about integrating Hong Kong-listed Bitcoin ETFs into the Stock Connect system, potentially allowing mainland Chinese investors to access these funds. 

Byworth’s remarks on social media highlighted ongoing discussions surrounding this potential integration, which could lead to a significant influx of capital from mainland China into the Bitcoin ETF market.

The initial performance of the ChinaAMC Bitcoin ETF, which gathered $121 million on its first trading day, has fueled optimism about the future of Bitcoin ETFs in Hong Kong. 

Samson Mow, a prominent figure in the industry, expressed bullish sentiments. At the same time, Brian HoonJong Paik, Co-founder & COO at SmashFi, emphasized the potential socio-economic benefits of mainland Chinese interest in Hong Kong’s Bitcoin ETFs. 

Paik highlighted the vast amount of Chinese wealth in real estate, suggesting that alternative investment opportunities could help stabilize the socio-economic landscape and mitigate social unrest.

As discussions continue, market participants are closely monitoring its potential impact on capital flows and the overall adoption of digital asset funds in the region.

The largest cryptocurrency on the market has rebounded to the $63,000 level, coupled with a 3% price increase in the last 24 hours alone.

Featured image from Shutterstock, chart from TradingView.com