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South Korea's National Pension Fund Acquired $33.7 Million in MicroStrategy Shares in Q2
South Korea's National Pension Service, the third-largest pension fund globally, purchased $33.7 million worth of MicroStrategy shares in Q2 2023, increasing its indirect exposure to Bitcoin. The pension fund's latest SEC filing also revealed it held 229,807 Coinbase shares, valued at $51 million, by the end of June. This move follows an earlier purchase of Coinbase shares in 2022, reflecting the fund's growing interest in crypto-related assets. MicroStrategy, a major Bitcoin holder with 226,500 BTC, is often seen as a traditional market proxy for Bitcoin exposure.
MakerDAO Halts New WBTC-Backed Loans Amid BitGo Concerns
MakerDAO contributors approved a proposal to halt new borrowing against BitGo’s wrapped Bitcoin (WBTC) by setting the WBTC debt ceiling to zero DAI, effectively blocking any new loans using WBTC as collateral. This decision came after BitGo announced a partnership with BiT Global, which raised security concerns due to the involvement of Tron founder Justin Sun and the shift of WBTC custody to multiple jurisdictions, including Hong Kong and Singapore. The changes do not affect existing loans backed by WBTC, as the liquidation threshold remains the same.
Institutional Adoption of Bitcoin ETFs Soars 27% in Q2
Institutional adoption of U.S. spot Bitcoin ETFs surged by over 27% in Q2 2024, with 262 new firms joining, bringing the total to 1,199 professional firms holding these investments, according to K33 Research. This increase underscores the growing interest from institutional investors, who now account for 21.15% of the total assets under management in Bitcoin ETFs, up from 18.7% in Q1. Despite this, Bitcoin has struggled to maintain momentum, dropping below $60,000 on August 14, even as ETF inflows remain inconsistent. Continued institutional adoption is seen as crucial for driving Bitcoin to new all-time highs, especially as retail investors still hold the majority of these ETFs.
Trading Desk Insights
Bitcoin took a nosedive on Thursday, plummeting below $56,100 in a swift and unexpected drop. This was particularly surprising given that the equity markets were on the rise at the same time. After several days of calm, the market action suddenly kicked into high gear, pushing BTC down to its lowest point since the panic in early August. We might see the downtrend continue toward $54,000, but a bounce-back is likely on the horizon. The summer lull is fading, and with the US elections just around the corner, we could see bullish momentum returning, especially in the crypto space.
On the ETF front, the action has been somewhat subdued lately. Bitcoin ETFs saw a modest $11.1 million inflow, while Ethereum took a hit with $39.2 million in outflows yesterday. Interestingly, BlackRock’s spot Bitcoin (IBIT) and Ethereum (ETHA) ETFs have overtaken Grayscale’s counterparts in assets under management. BlackRock’s ETFs now hold over $21.22 billion, edging out Grayscale’s $21.20 billion.
Turning to Ethereum, gas fees hit a five-year low earlier this week, dropping 95% from the 83.1 gwei levels we saw back in March. This plunge is largely due to users and applications migrating to trendier blockchains like Solana or Layer 2 solutions. Historically, low gas fees have often preceded a rise in ETH prices, so this could be a setup for a rally.
On the corporate side, South Korea’s pension fund made a significant move, snapping up around $34 million worth of MicroStrategy shares—a clear bet on Bitcoin by proxy.
Meanwhile, equity futures dipped slightly on Friday morning as investors eyed the close of a week marked by a strong recovery rally. Thursday saw both the S&P 500 and Nasdaq notch their sixth straight day of gains, with the S&P up over 3% and Nasdaq over 5% for the week—on track for their biggest weekly gains since November. Strong retail sales data and a drop in weekly jobless claims have eased recession fears, fueling optimism in the markets.
Crypto Charts
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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