Abu Dhabi loaded up on Bitcoin ETF shares—then the market tanked

The Abu Dhabi Investment Council (ADIC) significantly expanded its exposure to Bitcoin during the third quarter, tripling its stake in BlackRock’s iShares Bitcoin Trust (IBIT) ETF just before the cryptocurrency market experienced a sharp downturn.

Summary

• Sam Bankman-Fried’s legal team will appear before the 2nd U.S. Circuit Court of Appeals to argue his FTX fraud conviction should be overturned.
• The defense claims the trial judge blocked evidence showing FTX had enough assets to cover withdrawals, which could have changed the jury’s verdict.
• SBF maintains that FTX’s downfall was caused by mismanagement and panic, not deliberate fraud.

According to Bloomberg News, citing a regulatory filing, ADIC increased its holdings from 2.4 million shares to nearly 8 million shares as of Sept. 30, a position valued at roughly $518 million at the time.

The investment, disclosed by an ADIC subsidiary, reflects a growing institutional interest in Bitcoin ahead of its early-October surge to a record $126,251, driven by surging inflows into spot Bitcoin ETFs such as IBIT, the world’s largest crypto ETF with more than $70 billion in assets.

Shortly after hitting its all-time high, Bitcoin suffered a steep decline triggered by liquidations of leveraged positions, falling below $92,000. Even so, ADIC characterized its Bitcoin allocation as part of a long-term diversification strategy, comparing the asset to gold and stating that it expects both to play structural roles in its portfolio as the global economy becomes increasingly digital.

Mubadala Investment Co., the $330 billion Abu Dhabi sovereign wealth fund that oversees ADIC, also reported holding 8.7 million IBIT shares worth $567 million at the end of the third quarter—unchanged from the previous period. While purchase prices were not disclosed, IBIT has dropped about 20% since Sept. 30, despite a modest third-quarter gain.

Bitcoin ETF outflows hit record levels

ADIC’s move mirrors other institutional buyers such as Harvard Management Co., which also increased its IBIT exposure. But broader investor sentiment has weakened amid the market slump, with U.S. spot Bitcoin ETFs seeing roughly $3.1 billion in outflows in November alone. IBIT recorded a single-day record outflow of $523 million after Bitcoin breached a key price threshold that pushed many ETF investors into losses.

Abu Dhabi’s continued push into crypto reflects its ambition to solidify its role as a global digital-asset hub. Mubadala has been a major force behind that strategy, including funding a $2 billion stake in Binance earlier this year through MGX, a tech investment firm backed by the emirate.

ADIC itself has recently bolstered its leadership as it scales up global investments, hiring industry veterans such as Alain Carrier and Ben Samild to senior roles.