Patient Capital, an asset manager with over $1.8 billion in assets, is planning to invest up to 15% of its funds in Bitcoin ETFs.
Shift to Bitcoin ETFs
The move signals a shift from the Fund’s previous focus on Grayscale’s Bitcoin Trust. Patient Capital will now invest in Bitcoin ETFs registered under the Securities Act of 1933.
Concerns about Cryptocurrency Market
Patient Capital acknowledges concerns about the cryptocurrency market, including:
- Differing auditing standards for Bitcoin
- Unregulated nature and lack of transparency of digital asset platforms
- Potential for fraud, manipulation, and security failures
Regulatory Risks
The filing also highlights regulatory risks, such as:
- Potential restrictions or bans on Bitcoin in the future
- Evolving regulatory landscape for cryptocurrencies in the US
- Uncertainty about the classification of digital assets as securities
Market Volatility and Liquidity
Patient Capital warns of:
- Market volatility and limited trading activity in Bitcoin ETFs
- Potential for premiums or discounts to net asset value
- Limited market liquidity and potential losses when selling shares
Conclusion
Patient Capital’s move to invest in Bitcoin ETFs reflects the growing institutional interest in cryptocurrencies. However, the filing also underscores the alleged risks associated with the cryptocurrency market, including regulatory uncertainties, market volatility, and limited liquidity.
