Hard SEC Data Shows Funds Plan To Invest Up To 15% Of Their AUM To Bitcoin

The U.S. Securities and Exchange Commission (SEC) has been a long-standing roadblock to the approval of spot Bitcoin ETFs. However, recent data suggests a shift, especially among Wall Street players, is underway. 

Taking to X on January 3, Marty Party observed that a growing number of funds that traditionally invest in securities are now making amendments to their prospectuses to allocate up to 15% of their assets under management (AUM) to Bitcoin.

What This Means For Bitcoin

This move is massive for Bitcoin and the broader crypto market. It suggests that institutional investors are increasingly bullish on Bitcoin and are willing to allocate a larger portion of their portfolios to the cryptocurrency. 

From a regulatory perspective, it could also indicate pressure on the SEC to approve spot Bitcoin ETFs. Since mutual funds are willing to adjust their prospectuses and allocate funds, it suggests that there is demand for Bitcoin–and possibly other crypto derivatives–among deep-pocketed institutional investors.

Citing SEC data, Party notes that several funds have already amended their prospectuses to invest up to 15% of their AUM in Bitcoin. Through a filing, Advisors Preferred Trust notified the regulator that it can now hold up to 15% of its AUM in Spot Bitcoin through Grayscale.

Arca Asset Management Trust also plans to hold up to 50% of its AUM in Spot Bitcoin offered by Grayscale, ProShares Bitcoin Strategy ETF, and futures contracts.

Funds making changes to invest in BTC | Source: EDGAR data from SEC

Even so, the U.S. SEC has hesitated to approve spot Bitcoin ETFs, citing market manipulation and investor protection concerns. However, the growing interest from institutional investors and politicians could force the SEC to reconsider its position. The regulator might approve the first spot Bitcoin ETF in January 2023. 

A Spot Bitcoin ETF Approval Is Massive, But Will The SEC Authorize?

This approval will be a major victory for crypto and Bitcoin, possibly opening the market to more investors. Subsequently, the decision would help legitimize Bitcoin as a mainstream asset class.

Before then, the trend of institutional investors allocating more money to Bitcoin is likely to continue. However, how prices react will be closely monitored in the weeks ahead. 

Bitcoin price trending downward on the daily chart | Source: BTCUSDT on Binance, TradingView
Bitcoin price trending downward on the daily chart | Source: BTCUSDT on Binance, TradingView

Earlier on January 3, Bitcoin prices flash crashed following reports that the SEC might, after all, not approve any spot Bitcoin ETF in January. Some analysts have also pinned the flash crash to rising funding rates, which recently rose to multi-month highs. 

Feature image from Canva, chart from TradingView

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