Major hedge funds, including Millennium Management, Capula Management, and Tudor Investment, significantly boosted their exposure to US spot bitcoin exchange traded funds (ETFs) in the third quarter, according to a report by Reuters citing securities filings.
The increase came as bitcoin soared to an all-time high above $90,000 last week, buoyed by President-elect Donald Trump’s pro-crypto stance.
Trump’s campaign pledged regulatory support for digital assets and even hinted at establishing a national bitcoin reserve, creating a favourable backdrop for the cryptocurrency market. Although bitcoin has since pared some gains, the rally fuelled a surge in a popular arbitrage trade targeting price gaps between spot bitcoin and its futures.
The so-called bitcoin basis trade involves buying spot bitcoin — or bitcoin ETFs — while shorting bitcoin futures, which have been trading at a premium throughout the year. Following the election, this price difference spiked, with annualised spreads reaching 17% on 11 November before easing to 12% on Friday, according to CF Bitcoin data.
Positions disclosed in this week’s 13-F filings provide insight into long equity bets but do not reveal short positions or derivatives strategies, leaving specific arbitrage trades unconfirmed.
Millennium Management, led by Israel Englander, more than doubled its stake in the iShares Bitcoin Trust (IBIT.O) to 23.5 million shares, valued at $849m. Millennium also increased its holdings in ARK 21Shares Bitcoin and Bitwise bitcoin funds, ending the quarter with $1.7bn in crypto ETFs. This represents a small fraction of its $70bn in assets under management.
London-based macro hedge fund Capula Management added shares in the iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund, totalling $600 in positions, while Tudor Investment, helmed by Paul Tudor Jones, quintupled its exposure to the iShares Bitcoin Trust, amassing 4.4m shares.
Schonfeld Strategic Partners also added to its bitcoin fund holdings.
