At least one sovereign wealth fund has been accumulating spot Bitcoin at current price levels, a sign of state-level conviction in the world's largest cryptocurrency.
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Sovereign funds buy Bitcoin at discount, CEO confirms 2 funds
Sovereign wealth funds have been accumulating spot Bitcoin, treating the current price as an entry point for state-level investment, according to MidChains CEO Basil Al Askari.
"I would be able to confirm that one, at least one, and possibly in the coming weeks, two sovereign wealth funds have been accumulating spot Bitcoin specifically," Al Askari said on Cointelegraph's Chain Reaction podcast on Monday.
Sovereign wealth funds collectively control more than $13 trillion globally, making even modest allocations significant for Bitcoin's supply dynamics. Abu Dhabi's Mubadala Investment Company invested $437 million in Bitcoin exposure through BlackRock's iShares Bitcoin Trust in February, while Bhutan's Druk Holding and Investments has been selling some of its holdings this year.
The entry of sovereign funds could accelerate Bitcoin's scarcity over the longer term, Al Askari said, as these holders maintain extended time horizons compared with retail or hedge fund investors. Other institutions sitting on the sidelines may follow, potentially triggering a broader wave of state-level adoption.
ETF Outflows Top $4.1B as Corporates Buy the Dip
The institutional picture has been mixed. Sustained outflows from US spot Bitcoin ETFs have exceeded $4.1 billion so far this month, according to data cited by Al Askari. Meanwhile, corporate treasuries continue to accumulate, with Strategy adding 3,657 Bitcoin to its holdings in June alone.
Coinbase's head of institutional strategy, John D'Agostino, told CNBC that the dip is being welcomed by institutional investors. "I just got off a plane from the Middle East, and I can tell you that the family offices in the UAE and the government and sovereign funds that are putting the effort into buying this asset class are not unhappy at being able to buy it at a discount," D'Agostino said.
The divergence between ETF outflows and direct institutional buying reflects a shift in holder composition. As sovereign funds and corporate treasuries accumulate with longer time horizons, the available supply of Bitcoin continues to shrink, Al Askari said. "Over the longer term period, we'll start to see Bitcoin becoming more and more scarce as a result of larger holders with much longer time horizons."
This article is for informational purposes only and does not constitute investment advice.
[1] MidChains CEO highlights Bitcoin discount as entry point for sovereign funds[2] Sovereign funds see Bitcoin discount as entry point: MidChains CEO[3] Down 45% Or More This Year, Are Any of These Once-Popular Altcoins Worth Buying?[4] STRF: Strategy's Financing Machine Is Stalling - And That's When This Preferred Shines[5] Global Markets
