When the SEC opened the door in January for bitcoin exchange-traded funds to hit the mainstream, many traditional financial institutions across Wall Street and beyond finally had the opportunity to buy into crypto. Since then, money has poured in, but in fits and starts.
On Wednesday, banks and hedge funds with more than $100 million in assets hit a deadline to file their second-quarter 13F reports, disclosing their investments and what they bought and sold over a three-month stretch.
There are no shortage of opportunities for firms that want to take their time getting into the market. Following an array of public ETF listings in January tied to bitcoin, the Securities and Exchange Commission went a step further last month, clearing the way for spot ether ETFs, allowing investors to get access to the second-largest cryptocurrency. Those new holdings will start showing up in third-quarter reports.
In the period from March through June, Goldman Sachs made its debut in the crypto ETF market, purchasing $418 million worth of bitcoin funds. Its biggest position is a $238 million ownership in shares of BlackRock’s iShares Bitcoin Trust. The bank also owns shares in spot funds from Grayscale, Invesco, Fidelity and others.
Morgan Stanley was the first among the big players on Wall Street to give the green light to its 15,000 financial advisors to start pitching clients, who have a net worth north of $1.5 million, bitcoin ETFs, specifically those issued by BlackRock and Fidelity. Up to this point, wealth management businesses have only facilitated trades if customers requested exposure to the new spot crypto funds.
Of Morgan Stanley’s $1.5 trillion in assets under management, the bank disclosed in its filing that it trimmed its position in spot bitcoin ETFs to around $189 million from roughly $270 million. Most of those cuts were due to sales of almost all of its shares in the Grayscale Bitcoin Trust, which has a much higher management fee than other ETFs. The vast majority of the bank’s spot bitcoin holdings are now through the iShares trust.
For most of the banks, the vast majority, if not all, of the ETF flows can be attributed to wealth management clients asking for exposure, rather than a decision by the firm to hold the assets on its balance sheet.
While Wall Street investment banks are coming in slowly, hedge funds are taking a more aggressive approach.
That’s down substantially from the $844 million worth of shares it held as of its May filing, having cut its stake in BlackRock’s fund by about half, and in Grayscale’s by more than half.
London-based Capula Investment Management, one of the top hedge funds in Europe with $30 billion under management, disclosed in a recent SEC filing that it holds more than $464 million in spot bitcoin ETFs, including the funds offered by BlackRock and Fidelity.
Point72 Asset Management and Apollo Management have also jumped into the market as have firms including Citadel Advisors, Jane Street and Fortress Investment Group.
Since launching in January, spot bitcoin funds have seen net flows of around $17.5 billion, bringing total assets in the funds to $53.5 billion as of mid-August. Grayscale’s fund, which existed previously and was converted to an ETF, has seen $19.4 billion in outflows since the change, though its new budget product has seen net inflows of $274 million.
Spot ether ETFs hold more than $7.6 billion as of Tuesday. Barclays analysts noted that trading volume across all spot crypto ETF products has declined, compared to spot exchange volumes.
Still, the new ETF activity has helped lift bitcoin prices, which hit a record above $73,000 in March. The price has since dropped sharply, to under $58,000, alongside volatility in the boarder markets, though it’s still up more than 30% this year.
“The crypto markets are strong because we have the sentiment shift,” Galaxy Digital chief Mike Novogratz told CNBC in May. “Crypto is now an asset class. It will be next year, it will be forever. And it wasn’t that way two years ago. There was risk around the asset class, and it’s been de risked.”
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Bitcoin mining lures new investors
ETFs aren’t the only way investors are playing the market.
Daniel Sundheim’s D1 Capital built up a bitcoin mining position in the latest quarter, taking advantage of a shift as miners retrofit their facilities to service artificial intelligence clients. Like crypto mining, artificial intelligence workloads require immense amounts of power.
D1, which managed about $19 billion at the beginning of the year, bought nearly $5.4 million worth of Bitdeer Technologies, $17.3 million of Iris Energy, and nearly $17.4 million in shares of Hut 8 Corp.
Hut 8 said in its first-quarter earnings report that it had purchased Nvidia’s AI processors and secured a customer agreement with a venture-backed AI cloud platform as part of its expansion. Iris Energy expects to generate up to $17 million in annual revenue from its AI cloud services.
The combined market capitalization of the 14 major U.S.-listed bitcoin miners hit a record high of $22.8 billion on June 15, according to a note from JPMorgan, which has also been investing capital into an ETF of miners and individual companies. UBS has added shares of Bitdeer, Bitfarms, Bit Digital, Hut 8, as well as more than $5 million in Iris Energy, as of its latest 13F filing.
In a bold bid to combat the crippling air pollution crisis in its capital, Delhi, Indian lawmakers have begun high-level discussions about a plan to phase out gas and diesel combustion vehicles by 2035 – a move that could cause a seismic shift in the global EV space and provide a cleaner, greener future for India’s capital.
Long considered one of the world’s most polluted capital cities, Indian capital Delhi is taking drastic steps to cut back pollution with a gas and diesel engine ban coming soon – but they want results faster than that. As such, Delhi is starting with a city-wide ban on refueling vehicles more than 15 years old, and it went into effect earlier this week. (!)
“We are installing gadgets at petrol pumps which will identify vehicles older than 15 years, and no fuel will be provided to them,” said Delhi Environment Minister Manjinder Singh Sirsa … but they’re not stopping there. “Additionally, we will intensify scrutiny of heavy vehicles entering Delhi to ensure they meet prescribed environmental standards before being allowed entry.”
The Economic Times is reporting that discussions are underway to pass laws requiring that all future bus purchases will be required to be electric or “clean fuel” (read: CNG or hydrogen) by the end of this year, with a gas/diesel ban on “three-wheelers and light goods vehicles,” (commercial tuk-tuks and delivery mopeds) potentially coming 2026 to 2027 and a similar ban privately owned and operated cars and bikes coming “between 2030 and 2035.”
Electrek’s Take
Xpeng EV with Turing AI and Bulletproof battery; via XPeng.
Last week, Parker Hannifin launched what they’re calling the industry’s first certified Mobile Electrification Technology Center to train mobile equipment technicians make the transition from conventional diesel engines to modern electric motors.
The electrification of mobile equipment is opening new doors for construction and engineering companies working in indoor, environmentally sensitive, or noise-regulated urban environments – but it also poses a new set of challenges that, while they mirror some of the challenges internal combustion faced a century ago, aren’t yet fully solved. These go beyond just getting energy to the equipment assets’ batteries, and include the integration of hydraulic implements, electronic controls, and the myriad of upfit accessories that have been developed over the last five decades to operate on 12V power.
At the same time, manufacturers and dealers have to ensure the safety of their technicians, which includes providing comprehensive training on the intricacies of high-voltage electric vehicle repair and maintenance – and that’s where Parker’s new mobile equipment training program comes in, helping to accelerate the shift to EVs.
“We are excited to partner with these outstanding distributors at a higher level. Their commitment to designing innovative mobile electrification systems aligns perfectly with our vision to empower machine manufacturers in reducing their environmental footprint while enhancing operational efficiency,” explains Mark Schoessler, VP of sales for Parker’s Motion Systems Group. “Their expertise in designing mobile electrification systems and their capability to deliver integrated solutions will help to maximize the impact of Parker’s expanding METC network.”
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The manufacturing equipment experts at Nott Company were among the first to go through the Parker Hannifin training program, certifying their technicians on Parker’s electric motors, drives, coolers, controllers and control systems.
“We are proud to be recognized for our unwavering dedication to advancing mobile electrification technologies and delivering cutting-edge solutions,” says Nott CEO, Markus Rauchhaus. “This milestone would not have been possible without our incredible partners, customers and the team at Nott Company.”
In addition to Nott, two other North American distributors (Depatie Fluid Power in Portage, Michigan, and Hydradyne in Fort Worth, Texas) have completed the Parker certification.
Electrek’s Take
T7X all-electric track loader at CES 2022; via Doosan Bobcat.
With the rise of electric equipment assets like Bobcat’s T7X compact track loader and E10e electric excavator that eliminate traditional hydraulics and rely on high-voltage battery systems, specialized electrical systems training is becoming increasingly important. Seasoned, steady hands with decades of diesel and hydraulic systems experience are obsolete, and they’ll need to learn new skills to stay relevant.
Certification programs like Parker’s are working to bridge that skills gap, equipping technicians with the skills to maximize performance while mitigating risks associated with high-voltage systems. Here’s hoping more of these start popping up sooner than later.
Based on a Peterbilt 579 commercial semi truck, the ReVolt EREV hybrid electric semi truck promises 40% better fuel economy and more than twice the torque of a conventional, diesel-powered semi. The concept has promise – and now, it has customers.
Austin, Texas-based ReVolt Motors scored its first win with specialist carrier Page Trucking, who’s rolling the dice on five of the Peterbilt 579-based hybrid big rigs — with another order for 15 more of the modified Petes waiting in the wings if the initial five work out.
The deal will see ReVolt’s “dual-power system” put to the test in real-world conditions, pairing its e-axles’ battery-electric torque with up to 1,200 miles of diesel-extended range.
ReVolt Motors team
ReVolt Motors team; via ReVolt.
The ReVolt team starts off with a Peterbilt, then removes the transmission and drive axle, replacing them with a large genhead and batteries. As the big Pete’s diesel engine runs (that’s right, kids – the engine stays in place), it creates electrical energy that’s stored in the trucks’ batteries. Those electrons then flow to the truck’s 670 hp e-axles, putting down a massive, 3500 lb-ft of Earth-moving torque to the ground at 0 rpm.
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The result is an electrically-driven semi truck that works like a big BMW i3 or other EREV, and packs enough battery capacity to operate as a ZEV (sorry, ZET) in ports and urban clean zones. And, more importantly, allows over-the-road drivers to hotel for up to 34 hours without idling the engine or requiring a grid connection.
That ability to “hotel” in the cab is incredibly important, especially as the national shortage of semi truck parking continues to worsen and the number of goods shipped across America’s roads continues to increase.
And, because the ReVolt trucks can hotel without the noise and emissions of diesel or the loss of range of pure electric, they can immediately “plug in” to existing long-haul routes without the need to wait for a commercial truck charging infrastructure to materialize.
“Drivers should not have to choose between losing their longtime routes because of changing regulatory environments or losing the truck in which they have already made significant investments,” explains Gus Gardner, ReVolt founder and CEO. “American truckers want their trucks to reflect their identity, and our retrofit technology allows them to continue driving the trucks they love while still making a living.”
If all of that sounds familiar, it’s probably because you’ve heard of Hyliion.
In addition to being located in the same town and employing the same idea in the same Peterbilt 579 tractor, ReVolt even employs some of the same key players as Hyliion: both the company’s CTO, Chandra Patil, and its Director of Engineering, Blake Witchie, previously worked at Hyliion’s truck works.
Still, Hyliion made their choice when they shut down their truck business. ReVolt seems to have picked up the ball – and their first customer is eager to run with it.
“Our industry is undergoing a major transition, and fleet owners need practical solutions that make financial sense while reducing our environmental impact,” said Dan Titus, CEO of Page Trucking. “ReVolt’s hybrid drivetrain lowers our fuel costs, providing our drivers with a powerful and efficient truck, all without the need for expensive charging infrastructure or worrying about state compliance mandates. The reduced emissions also enable our customers to reduce their Scope 2 emissions.”
Page Trucking has a fleet of approximately 500 trucks in service, serving the agriculture, hazardous materials, and bulk commodities industries throughout Texas. And, if ReVolt’s EREV semis live up to their promise, expect them to operate a lot more than 20 of ’em.