Recent analysis (1) from London-based Nickel Digital Asset Management (Nickel), Europe’s largest regulated and award-winning digital assets hedge fund manager founded by senior traders and investment professionals formerly from major financial institutions including Goldman Sachs and JPMorgan, reveals that 20 listed companies with a market cap of over $1.0 trillion have around $9.6 billion invested in Bitcoin. They originally spent $5.9 billion buying the cryptocurrency.
North American corporations dominate the listed company investment in Bitcoin with US and Canadian companies accounting for 13 of the 20. The list also has corporates based in UK, Germany, Turkey, Liechtenstein, Hong Kong, Norway, and Australia.
Nickel’s analysis reveals a further 19 listed companies have purchased Bitcoin, without revealing the full details of their portfolio composition at this stage.
Further analysis by Nickel reveals a staggering $60 billion worth of Bitcoin is held through various bitcoin closed-ended trusts and exchange traded products. These investment funds hold these allocations on behalf of their clients, including a range of retail investors, asset managers, and – increasingly – institutional asset allocators.
The geography of these funds exhibits a similar strong North American bias, with US and Canadian funds accounting for an overwhelming 75% of the above holdings.
Nickel research(3) from earlier this year with institutional investors and wealth managers across Europe who collectively manage over $110 billion in assets, revealed that over the next two years 81% expect to see an increase in corporations using Bitcoin for their treasury reserves. Of these, some 29% expect to see dramatic growth in this trend.
Anatoly Crachilov, CEO and Founding Partner of Nickel Digital, commented: “We are evidencing an increasing number of corporates allocating to Bitcoin as part of their treasury reserves. This is an important validation of this asset as a long-term hedge against currency debasement, as well as source of uncorrelated returns.”
“The analysis of digital assets performance versus traditional asset classes shows sizable outperformance by digital assets over the medium to long term. This helps explain the increasing interest to digital assets by corporations and institutional investors as part of their wider asset allocation.”
“The crypto assets space remains volatile as it is moves through the early stage of adoption curve. However, increasing allocations by large-scale institutional and corporate players is expected to lead to a reduction in volatility over time, thanks to a longer-term, stickier type of capital brought by those investors, as well as a much larger liquidity pool of crypto ecosystem.”
Nickel Digital’s infrastructure is designed to offer various access points to the crypto market
Nickel currently has four funds investing in the digital asset space. Its market-neutral Digital Asset Arbitrage Fund pursues an absolute return strategy without expressing directional views on the underlying crypto assets market. It exploits market inefficiencies and price dislocations, and harnesses swings of volatility to deliver consistent positive returns within a strictly defined risk management framework. The fund delivered solid double digit returns with over 94% of positive months since inception 2.5 years ago, with volatility of 3.4% and Sharpe of 3.7.
Diversified Alpha Fund is a non-directional multi-strategy fund which wraps a portfolio of attractive but hard-to-access and capacity-constrained strategies into a single, investible fund. Among the strategies it deploys are high-frequency market making, statistical arbitrage, relative value, volatility arbitrage, and trend following. The fund protected capital well in May, delivering a record monthly performance of +4.7% despite the underlying market going through one of the strongest corrections in recent times. It runs with volatility of 7.3% and Sharpe of 3.
DeFi Liquid Venture Fund is designed to capture the growth potential of the broader digital assets space outside Bitcoin, spotting early winners in Layer 1 protocols and Decentralised Finance, the area of greatest financial innovation. The fund is an actively managed research-driven vehicle aiming at identifying early winners and capturing structural expansion of this space. Since its inception in March 2021, it has outperformed bitcoin by over 40%, highlighting greater innovation originated in the Defi space.
Nickel’s Digital Gold Institutional Fund, a Bitcoin tracker, provides secure, efficient, transparent, and liquid access to physically allocated Bitcoin. It delivers institutional-grade precision of trade execution, trades 7 days a week and offers one of the industry’s lowest expense ratios.