A spokesperson for Millennium declined comment. Grayscale CEO Michael Sonnenshein declined comment through a spokesperson, citing private-placement SEC regulations. Millennium, run by founder Izzy Englander, has $48.3 billion of AUM. Its flagship hedge fund strategy gained 2.2% in February, bringing the firm’s year-to-date gains to 2.8%, one of the sources said. “The arbitrage trade is just so broken,” one of the sources said, referring to the crumbling of the price-premium that GBTC traded at relative to the price of bitcoin (BTC.)
“The Grayscale® Bitcoin Trust private placement is offered on a periodic basis throughout the year and is currently closed,” reads an ongoing pop-up on Grayscale’s website. The trust is designed to serve as an institutional-grade product to allow institutional investors including hedge funds to cash in on bitcoin’s upside with less volatility. Its showing on that front lately has been mixed.
Wall Street sources, however, are pointing to the fact that Millennium having skin in the GBTC game to begin with is likely another bullish indicator for bitcoin as an asset-class. The holdings also suggest that Millennium’s synthetic crypto exposures are more substantial than what has previously been reported. Millennium, like its peer voluminous multi-strategy hedge funds, makes and loses millions of dollars each day. Indications are that the GBTC trade was not especially consequential for the firm’s performance showing on the whole.
New York-based Van Eck formally started the clock for the SEC to rule on their bitcoin ETF application in March. The SEC has until early May to either approve, deny or delay the decision. The extent of Millennium’s current GBTC holdings are not clear. Count Goldman Sachs, Fidelity and Morgan Stanley among the growing number of institutional investors aiming to wrangle SEC approval for an ETF that would hold BTC directly and provide more favorable liquidity terms than a trust structure.
Because GBTC is structured as a trust, Millennium and other Grayscale limited-partners typically have to maintain their GBTC exposures for at least six months. Grayscale on Monday announced their plans to eventually convert the trust into a bitcoin exchange-traded fund (ETF) a field that has gotten increasingly crowded as of late. Still, the fact that Millennium was trading GBTC to begin with is starting to draw interest from crypto market participants. The firm appears to be the largest asset-manager yet to emerge in the crowded GBTC trade, likely a bullish indicator for bitcoin itself.
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