Barclays and Citigroup increased their investments in Bitcoin exchange-traded funds. This is evident from their quarterly reports. All data is recorded as of September 30.
What an ETF is. It is a fund that trades on an exchange like a regular stock and itself holds the asset on behalf of the investor. IBIT is such a fund from BlackRock, FBTC is from Fidelity.
Why this matters to a trader. The reports show which of the major players is entering Bitcoin and which is cutting its position.
How much did the banks buy?
- Barclays - 3.94 million IBIT shares, 48% more than the 2.66 million on June 30. In money terms, that is $187 million versus $88.5 million.
- Citigroup - a new position of roughly $119 million in FBTC, Fidelity's Bitcoin fund.
- Citigroup in IBIT - 521 thousand shares versus 347 thousand, a 50% increase.
1,389 institutions filed reports. Their investments in such funds grew over the quarter to $5.25 billion from $3.35 billion. Form 13F reports had to be filed by Monday.
Form 13F is a mandatory quarterly report by managers on their positions.
Bitwise data. Banks collectively hold $258 million, or 4.9% of reported positions. A quarter earlier it was $107 million and 3.2%.
- $3.5 billion, or 66.6% - the share of investment advisers, the largest holders. Last quarter they had $2.2 billion.
- Kamran Khasravi, analyst at Bitwise - believes the share of long-term holders among investors in these funds is growing.
Why are the amounts misleading?
Yonatan Randin, senior analyst at PrimeXBT, reminds us to look at the number of shares, not just the amounts. IBIT rose in price by roughly 41% in the third quarter, so part of the increase in money terms is simply revaluation.
Key point: the figures in the reports are a snapshot as of September 30, before Bitcoin's decline. In the third quarter, US Bitcoin ETFs took in $6.34 billion in net inflows, and since the start of the fourth quarter through Tuesday they have given back about $2.1 billion.
What does this mean for a trader?
The reports are about other people's money. The size of a bank's position does not affect your result; only your own volume and risk matter.
- Dates of publications and data releases - in the economic calendar.
- How a prop firm account works - in the academy.
What's next?
- Reports from the late filers. JPMorgan, Wells Fargo and the hedge funds Millennium and Schonfeld have not yet shown their 13Fs.
- Cross-checking against price. The next reports will show the number of shares, not just the amounts in money terms.
While the banks count millions, you count your deposit
You read such reports and roughly understand where the market is heading. Only you open a position based on that understanding with your couple of thousand, while Barclays does it with $187 million. The difference in the end is not in the forecast, but in the notional. Prop trading is built precisely around this gap: you pay for selection, after which you trade the company's account with a hard loss ceiling and take an agreed share of the profit. The next batch of 13Fs will come out in a quarter, but you can break down the mechanics of the account right now.