Bank of New York Mellon (BNY Mellon), the world's largest asset custodian bank with $ 2 trillion in assets under management, admitted that investing in gold instead of Bitcoin was a mistake.
More precisely, the bank said the performance of BNY Mellon Opportunistic Small Cap Fund (DSCVX), one of its ETFs, was significantly affected by not investing more in companies with exposure to cryptocurrencies.
Bitcoin yes, gold no
According to the filings with the United States Securities and Exchange Commission (SEC), the ETF's low efficiency is mainly due to the lack of shares of companies that invested their resources in Bitcoin.
BNY Mellon specifically mentioned a missed opportunity to acquire MicroStrategy shares:
"The fund's performance was also hampered by the decision not to own MicroStrategy, whose shares skyrocketed when it announced it had invested in Bitcoin."
On the other hand, the bank stated that the fund's position in the gold miner Alamos Gold "detracted from performance". After all, stocks were affected by low gold prices.
The ETF in question is focused on investing in low-value stocks. Between September 1, 2020 and February 28, 2021, the fund increased by 35%. Meanwhile, its benchmark, the Russell 2000 Index, rose 41.7% in the period.
Some of the fund's largest allocations include U.S. airline SkyWest, enterprise cloud provider Cloudera and healthcare provider Acadia.
In addition, 23% of investments are in the industrial sector, 17.5% in health, 15.9% in technology and 14.2% in financial services.
88 ETFs are exposed to MicroStrategy
According to ETF.com, 88 ETFs are currently exposed to MicroStrategy. On average, US ETFs have allocated 0.57% of their capital to MicroStrategy.
To date, the company has accumulated about 92,000 Bitcoins in its accounts. Since the first investments in August 2020, the value of cryptocurrencies managed by MicroStrategy has increased by 120%. MSTR's share price soared 385%, from $ 130 to $ 650.
Despite regret over the lack of exposure to MSTR, BNY Mellon is making significant investments in the cryptocurrency sector.
The bank led a $ 133 million Series C financing round from cryptocurrency custodian Fireblocks.
In February, as reported CriptoFácil, the bank also announced its intention to offer Bitcoin custody services.
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