Altshuler Shaham invests $100m in world's biggest bitcoin fund

Gilad Altshuler

The investment in GBTC earned the Israeli investment house returns of 100% within two months, after the price of bitcoin skyrocketed.

Exclusive: Israeli investment house Altshuler Shaham has recently benefitted from significant exposure to bitcoin investment due to the cryptocurrency market boom. "Globes" has learned that Altshuler Shaham invested about $100 million in Grayscale Bitcoin Trust (GBTC), the world's largest bitcoin fund, at the end of 2020. The investment earned the Israeli investment house returns of 100% within two months, after the price of bitcoin skyrocketed.

This is the first time that an Israeli institutional body has purchased an exposure to bitcoin on this scale for its customers. Altshuler Shaham, one of the biggest investment houses in Israel, managed assets worth NIS 171 billion at the end of January 2021, in long-term savings in pension and provident funds.

GBTC tracks bitcoin prices in dollars according to the index published by TradeBlock. The fund is managed by Grayscale Investments, which is one of the largest cryptocurrency investors in the world and part of the Digital Currency Group, led by its founder Barry Zilbert. GBTC, traded over the counter in New York, has a market cap of $34 billion. The fund's share price has risen 495% over the past 12 months including by 60% since the start of 2021. Only serious investors can invest in the fund, which requires a minimum $50,000 investment and takes a 2% annual management fee.

Altshuler: This is a new investment for us

Altshuler Shaham cofounder, co-owner and co-CEO Gilad Althshuler told "Globes" that the investment in GBTC from funds in the investment portfolio of its members was made in the second half of last year. He said that 0.3% of the funds in the portfolios were invested in GBTC.

Buying GBTC shares, which provides indirect exposure to bitcoin, was executed by Altshuler Shaham around the price of $21,000. Two months after that, at the beginning of February, the price of bitcoin crossed the $40,000 threshold and continued to soar, and at that stage Altshuler Shaham sold one third of its holdings in GBTC.

After the sale, Altshuler Shaham is currently left with GBTC shares worth $150 million. Gilad Altshuler told "Globes," "This is a new investment for us. It took several months before we received all the regulatory approvals and all the legal opinions that approved the investment in the sector."

Will you increase the investment this year?

"It depends on the price," said Altshuler. "We were somewhat amazed at the speed with which bitcoin reached these prices, when the global market value crossed the trillion dollar threshold and it concerned us a little. Therefore, we decided to realize some of the holdings, so that we would at least have brought back home the $100 million we invested in the fund."

Bitcoin was trading Wednesday evening at $56,000, up 12% from last week. Since the start of 2021 the price of bitcoin has risen 70%, reaching an all-time record of $58,330 on February 21.

Published by Globes, Israel business news - en.globes.co.il - on March 11, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Gilad Altshuler
Gilad Altshuler
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