Bitcoin monthly digest: June 2024

As July is now underway, we're excited to bring you, once again, the latest issue of our monthly Bitcoin digest. This newsletter is your essential guide for quick updates on all things Bitcoin. There has been no shortage of developments last month, so without further ado, let’s dive into June's highlights and uncover the most recent advancements in the Bitcoin-verse.

• Bitcoin ETFs: a new common denominator in the investment realm?

As discussed previously on our blog, the introduction of Bitcoin-backed exchange-traded funds (ETFs) financial products sparked unprecedented institutional interest. In January, the SEC approved nine new ETFs offering spot market Bitcoin exposure, outperforming the earlier futures-based ETFs. In the first quarter (January-March 2024) alone, institutional investments in these ETFs exceeded expectations, with BlackRock's ETF reaching $10 billion in assets at record speed. Recent 13F filings, required for institutions with over $100 million in assets, reveal a significant surge in Bitcoin ETF ownership.

As of the latest filings, 534 institutions with over $1 billion in assets have allocated to Bitcoin in Q1. This includes hedge funds, pensions, and insurance companies, highlighting extensive adoption. More than half of the largest 25 US hedge funds now have Bitcoin exposure, including a $2 billion position from Millennium Management. Additionally, 11 of the top 25 Registered Investment Advisors (RIAs) are now invested in Bitcoin ETFs.

That being said, while pervasive, institutional allocations are still relatively small in size: among major hedge funds, RIAs, and pensions, the average allocation is less than 0.20% of assets under management (AUM). Even Millennium's $2 billion investment is less than 1% of their total holdings.

• Germany sells Bitcoin!

Through a series of transactions that have taken place in the last two weeks, the German Federal Criminal Police Office (BKA) has moved Bitcoin worth approximately $2 billion to different exchanges including Bitstamp, Coinbase, and Kraken. These Bitcoin were originally seized in 2013 during a crackdown on Movie2k.to, a notorious film piracy website. At the time, BKA confiscated nearly 50k Bitcoin. These recent movements suggest the German authorities may be looking to liquidate some of the seized assets.

Germany's actions mirror those of the US government, which has also recently transferred large amounts of Bitcoin to exchanges, possibly signalling an intent to sell. These transfers have sparked significant speculation within the Bitcoin community about potential impacts on the market. Despite these notable transfers, at the time of writing, the German government still holds a significant portion of the seized Bitcoin. Approximately 20k Bitcoin, worth about $1.3 billion (data from Arkham Intelligence, sourced on July 9th 2024) remain in government wallets:

Will they be selling the rest of their seized Bitcoin soon?

• Victims of fraudulent exchange soon to be compensated

Mt. Gox, the defunct Bitcoin exchange, announced it will start distributing assets stolen in a 2014 hack beginning in July, after numerous delays. Nobuaki Kobayashi, the Rehabilitation Trustee, stated on the Mt. Gox website: "the repayments will be made from the beginning of July 2024" and emphasized that due diligence and safety steps are still required.

Once the world's largest Bitcoin exchange, Mt. Gox handled over 70% of all Bitcoin transactions before hackers stole approximately 740k Bitcoin in 2014, now worth around $43 billion. Following its bankruptcy that year, repayment to victims has been repeatedly postponed, with a Tokyo court setting an October 2024 deadline for the civil rehabilitation plan. In May, Mt. Gox moved over 140k BTC (about $8 billion) from cold wallets, likely in preparation for repayments. The repayments will be made in Bitcoin through partnered exchanges, with the order depending on the completion of required due diligence. Victims, who have waited over ten years, are hopeful about recovering their lost funds. The reimbursements will distribute 142k Bitcoin and 69 billion Japanese yen to about 127k individual creditors.

That's a wrap for now, folks! Thank you for reading! Feel free to get in touch using the "Contact us!" button at the top of this page, or leave a comment down below with any questions or comments. We look forward to keeping you posted on the latest Bitcoin news next month. See you in a few weeks with our July newsletter.