Fund Plans to Invest Up to 15% of Its AUM in Bitcoin, SEC Data Shows

The U.S. Securities and Exchange Commission (SEC) has long been an obstacle to approving spot bitcoin ETFs. However, recent data suggests that a shift is taking place, especially among Wall Street players.

In a January 3 interview with X, Marty Party noted that a growing number of funds that traditionally invested in securities are now amending their prospectuses to allocate as much as 15% of their assets under management (AUM) to bitcoin.Kaspa mining

What This Means for Bitcoin

This move is significant for Bitcoin and the broader crypto market. It shows that institutional investors are becoming increasingly bullish on Bitcoin and are willing to allocate a large portion of their portfolios to cryptocurrencies.

From a regulatory perspective, it could also indicate that the SEC is under pressure to approve spot bitcoin ETFs. As mutual funds are willing to tweak their prospectuses and allocate capital, it suggests that there is demand for Bitcoin (and possibly other cryptocurrency derivatives) from well-heeled institutional investors.

Citing SEC data, Party notes that some funds have changed their prospectuses to invest up to 15 percent of their AUM in bitcoin. Advisors Preferred Trust notified regulators in a filing that it can now hold up to 15 percent of AUM in spot bitcoin through Grayscale.

Arca Asset Management Trust also plans to hold up to 50 percent of its AUM in spot bitcoin, the ProShares Bitcoin Strategy ETF and futures contracts offered by Grayscale.

Fund Changes Investment ETF Strategy| Source: SEC’s EDGAR Data

Even so, the SEC is hesitant to approve spot bitcoin ETFs, citing market manipulation and investor protection concerns. However, growing interest from institutional investors and politicians could force the SEC to reconsider its position. The regulator could approve the first spot Bitcoin ETF in January 2023.

Spot Bitcoin ETFs are getting tons of approvals, but will the SEC approve them?

This approval would be a major win for cryptocurrencies and Bitcoin, potentially opening up the market to more investors. Subsequently, the decision will help legitimize Bitcoin as a mainstream asset class.Mining Miner

Until then, the trend of institutional investors allocating more money to Bitcoin is likely to continue. However, the price reaction will be closely watched in the coming weeks.

Bitcoin Price Trending Downward on Daily Chart | Source: BTCUSDT on CoinSense, TradingView

Earlier on January 3, reports that the SEC may not approve any spot bitcoin ETFs in January caused the bitcoin price to plummet. Some analysts also blamed the flash crash on rising funding rates, which recently rose to multi-month highs.