It’s been widely reported that Mubadala Investment Co recently made a significant investment in Bitcoin via BlackRock’s iShares Bitcoin Investment Trust (IBIT), according to a filing with the SEC. It has also been noted that the investment by the Abu Dhabi sovereign wealth fund roughly coincided with BlackRock receiving a commercial license to operate in Abu Dhabi. On the face of it, this appears to be just another investment. But a tiny bit of analysis shows it is significant, even for the sovereign wealth fund.
Bitcoin is the fund’s second largest investment, by quite a big margin. The next largest holding is a longer term one in ARM worth $182 million.
The total value of the fund at the end of last year was $20.4 billion, so Bitcoin represents just over 2% of the total value. However, the fund’s largest investment in semiconductor firm GlobalFoundries is valued at $19.3 billion. Mubadala owns more than 80% of the firm.
Hence, IBIT accounts for 39% of the remainder of the fund, which is not particularly diversified. The previous quarter there were just 14 investments compared to 55 in the latest one for the end of 2024. Forty six of the holdings are worth less than five million dollars.
So while this is a small proportion of the fund, it would be considered an important investment.
This news comes while there’s a debate about whether cryptocurrency is an appropriate investment for such funds. The crypto community is pushing for the United States to create a Bitcoin reserve. The Trump administration is saying it will consider it, with the executive order indicating it will use confiscated crypto, rather than direct investment.
On the flip side, a Director of the European Central Bank (ECB) and his colleague has argued in a paper that any investment in Bitcoin involves a transfer of wealth to early Bitcoin holders. He was not referring to central bank or sovereign fund investments. The concern is that Bitcoin is not viewed as a productive asset. Hence, they worry that investment could shift away from productive assets, impacting economic growth. They even consider banning it.
The author does not hold any Bitcoin, either directly or indirectly.
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