Abu Dhabi Funds Lost $118M on Bitcoin ETFs

Abu Dhabi's sovereign wealth funds experienced a substantial paper loss of $118 million on their investment in BlackRock's Bitcoin ETF during the last quarter. Mubadala Investment Company and the Abu Dhabi Investment Council held a combined 22.94 million shares of the iShares Bitcoin Trust (IBIT) as of June 30. This stake was valued at $764 million, a decrease from its $881 million valuation three months earlier.

Despite the quarter-end loss, the investment underwent a significant volatile period. Bitcoin's price surged in May, pushing the value of the funds' IBIT holdings to approximately $1.07 billion. However, a subsequent 17.9% decline in Bitcoin's price during June erased these gains, leaving the stake $302 million below its May peak. Both funds reported their holdings via Form 13F, confirming an exact match in share counts from the previous quarter, indicating no sales occurred.

The impact of this loss varied between the two entities. For Mubadala, the $274 million IBIT stake represented a mere 1.4% of its $34.77 billion U.S. portfolio, second only to chipmaker GlobalFoundries. In contrast, the Abu Dhabi Investment Council's portfolio is more concentrated, with its $274 million IBIT stake constituting a significant 38% of its $714 million U.S. holdings.

While these Abu Dhabi funds maintained their positions, other institutional investors trimmed their Bitcoin ETF exposure. Intesa Sanpaolo, Italy's largest banking group, drastically reduced its IBIT holding and shifted towards Ethereum products. Data also showed spot Bitcoin funds experiencing outflows in late July, contrasting with inflows into Ethereum funds, indicating a broader shift in institutional sentiment.