Big Players Are Boosting Bitcoin Holdings

The Securities and Exchange Commission (SEC) could finally change its tune regarding spot Bitcoin exchange traded funds. A notable rally in the largest cryptocurrency fueled speculation. And data indicate large institutional players are increasing their Bitcoin holdings.

That could prove impactful for equity-based, crypto-related exchange traded funds, such as the Invesco Alerian Galaxy Crypto Economy ETF (SATO). Actually, it already is as SATO is higher by a staggering 147% on a year-to-date basis.

Bitcoin has been trending higher over the past several weeks as a slew of traditional asset managers, including some of the biggest names in the ETF industry, filed applications for spot biotin ETFs. And that’s a sign credible money managers and fund issuers see long-term viability in it. As such, fund holdings of the digital asset are approaching 696,000 coins.

Why It Matters to SATO

SATO follows the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Equity, Trusts, and ETPs Index. And the bulk of its 35 equity holdings engages in crypto mining. This industry correlates to the prices of the assets mined.

So the higher Bitcoin prices go, the more benefits SATO holdings accrue. A clear, efficient avenue for higher Bitcoin prices is for more institutional buyers to enter the market. But not only do they buy in size, but they also bring credibility to an asset class that’s long faced doubts and concerns regarding volatility and excessive speculation by smaller investors.

“More importantly, though, recent news of new entrants into Bitcoin underscores the staying power of this asset class more broadly. And many investors view this as a once-in-a-generation investment opportunity,” Grayscale CEO Michael Sonnenshein said in an interview with CNBC.