Royal Bank of Canada Allocators Cut Most Crypto Stocks Last Quarter

Please fol­low and like us:
Pin Share

Port­fo­lio man­agers tied to the Roy­al Bank of Cana­da — the nation’s largest bank — slashed stakes across the major­i­ty of their cryp­to-relat­ed port­fo­lios last quarter.

Block­works ana­lyzed the RBC’s SEC fil­ings total­ing 34 affil­i­at­ed enti­ties (includ­ing out­side asset man­agers that do busi­ness with RBC), to get a pulse on insti­tu­tion­al sen­ti­ment on equi­ties linked to cryp­tocur­ren­cy operations. 

(A num­ber of out­side asset man­agers that do busi­ness with one of RBC’s affil­i­ates, includ­ing the state-run pen­sion fund Alas­ka Per­ma­nent, were rep­re­sent­ed in the SEC dis­clo­sures. It’s like­ly as a result that this analy­sis includes stocks owned by third-par­ty man­agers run­ning lim­it­ed part­ner or pro­pri­etary capital.)

Some cryp­to stocks were cut entire­ly. Embat­tled cryp­to-friend­ly bank Sig­na­ture through RBC’s most recent SEC stock dis­clo­sure has fall­en off from RBC’s insti­tu­tion­al port­fo­lio list — same with bit­coin min­ing firms Argo, Maw­son Infra­struc­ture and Iris Energy. 

All are pub­licly trad­ed on major exchanges, with the excep­tion of Sig­na­ture, con­sid­er­ing the company’s stock now trades over the counter (OTC) for pen­nies on the dol­lar after its collapse. 

RBC allo­ca­tors held more than 41,000 Sig­na­ture shares at the end of last year, worth near­ly $4.8 mil­lion at the time. The bank would col­lapse less than two months lat­er. It’s unclear exact­ly when the shares were sold, and the hold­ings appear to have rep­re­sent­ed a frac­tion of the bank’s over­all hold­ings at the time. 

Their stakes in the three bit­coin min­ers were far small­er, only worth a few thou­sand dol­lars alto­geth­er. SEC fil­ings are denom­i­nat­ed in US dol­lars, not Cana­di­an dollars. 

Oth­er bit­coin min­ers are hold­ing on, despite being slashed sig­nif­i­cant­ly. Funds doing busi­ness with RBC sold shares in 11 min­ing stocks. The sell­ing activ­i­ty for Riot, Cipher, Hive and Marathon were all cut by upwards of 40% in share count terms. 

  • Finan­cial ser­vices firm Bakkt was also shed by two-thirds, 
  • bit­coin-heavy MicroS­trat­e­gy by one-third (although $6.8 mil­lion in bonds were added),
  • and SEC favorite Coin­base by 11%. 

If Block were on this chart, it would dwarf all oth­er positions

RBC insti­tu­tion­al invest­ment port­fo­lios now con­tain $4.8 mil­lion in COIN, per the SEC filings.

Not all moves made were bear­ish. RBC allo­ca­tors boost­ed posi­tions across 10 cryp­to and cryp­to-adja­cent stocks. Hut 8 scored a near-55% boost, going from 21,745 shares ($43,000) to 33,171 ($65,600) quar­ter on quarter.

Jack Dorsey’s fin­tech Block, the firm behind BTC-friend­ly Cash App, was also bumped by half, with RBC port­fo­lio man­agers alto­geth­er dis­clos­ing 2 mil­lion shares ($137.5 mil­lion), and an addi­tion­al $9.2 mil­lion in cor­po­rate bonds.

Robin­hood was more than dou­bled (now at 156,300 shares worth $1.35 mil­lion), as was ProShares’ bit­coin strat­e­gy ETF, BITO, although RBC funds still only dis­closed $10,000 of the stock.

One sur­prise is Sil­ver­gate, the oth­er cryp­to-friend­ly bank that faced an untime­ly demise ear­li­er this year. 

As of March 31, RBC port­fo­lios held 84% more Sil­ver­gate shares than the pre­vi­ous quar­ter — 16,335 shares com­pared to 8,878.

Crypto exposure still minimal for Royal Bank of Canada

Alto­geth­er, RBC allo­ca­tors held $108 mil­lion in cryp­to and cryp­to-adja­cent stocks at the end of 2022. They, through their most recent dis­clo­sures, held $156.5 mil­lion — although Block makes up near­ly 94% of that expo­sure (these fig­ures also con­tain options as expressed via puts).

One year ago, that fig­ure was clos­er to $200 mil­lion, and two years ago it was more than $754 million. 

But again, those stats were skewed by RBC’s enor­mous stake in Block, worth $703 mil­lion. Block’s share price has since col­lapsed by three quarters.

Block hasn’t per­formed very well over the year to date, either

Bit­coin min­er Greenidge has proven a man­ag­er favorite, with total share count pop­ping more than 350% year on year, from 535 to 2,459, but the stake is tiny, just $9,000.

In fact, all of RBC’s dis­closed cryp­to expo­sure is minis­cule com­pared to its over­all hold­ings. RBC itself man­aged $1.5 tril­lion in assets as of the first quar­ter, while its insti­tu­tion­al funds dis­closed a US-list­ed stock port­fo­lio of almost $354 billion.

That puts RBC’s cryp­to expo­sure weight at just 0.04%. 

Just for the record.


Get the day’s top cryp­to news and insights deliv­ered to your email every evening. Sub­scribe to Block­works’ free newslet­ter now.

Want alpha sent direct­ly to your inbox? Get degen trade ideas, gov­er­nance updates, token per­for­mance, can’t‑miss tweets and more from Block­works Research’s Dai­ly Debrief.

Can’t wait? Get our news the fastest way pos­si­ble. Join us on Telegram and fol­low us on Google News.


Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published. Required fields are marked *