In the second quarter of 2024, institutional investors in the United States are increasing their Bitcoin holdings through spot exchange-traded funds (ETFs). Based on data from Bitwise, approximately 66% of these investors either maintained or increased their Bitcoin ETF positions. According to 13F filings submitted to the Securities and Exchange Commission (SEC), 44% of asset managers expanded their Bitcoin ETF holdings during the quarter, while 22% held steady. Only 21% reduced their positions, and 13% exited entirely. Bitwise’s Chief Investment Officer, Matt Hougan, described the trend of institutional investors retaining and growing their Bitcoin ETF holdings as positive, similar to trends seen with other ETFs.
Despite a 14.5% decline in Bitcoin’s value over the quarter, institutional investors have shown resilience in holding onto their ETF positions. Hougan highlighted a significant increase in the number of holder/ETF pairs, rising from 1,479 in Q1 to 1,924 in Q2, a 30% surge. This trend persists even as Bitcoin prices fell, demonstrating the steady hand of institutional investors who are less likely to panic sell during market volatility. Hedge funds like Millennium, Schonfeld, Boothbay, and Capula are among the major ETF holders, alongside various advisers, family offices, and other institutional players, according to Hougan.
In the latest 13F filings, investment bank Morgan Stanley reported owning over 5.5 million shares of BlackRock’s iShares Bitcoin Trust, valued at $188 million as of June 30, positioning it as a top-five holder of Bitcoin ETFs. Similarly, Goldman Sachs disclosed significant exposure, holding more than $238 million in shares of various spot Bitcoin ETFs. Regarding digital assets, the market experienced a significant rebound last week, with investment products attracting $176 million in inflows as investors took advantage of recent price dips. Ethereum emerged as the primary beneficiary of the market’s rebound, attracting $155 million in inflows. This year-to-date inflow for Ethereum stands at $862 million, the highest level since 2021, largely attributable to the launch of U.S. spot-based ETFs.
Bitcoin, on the other hand, had a mixed week with outflows initially but managed to reverse this trend in the latter part of the week, recording $13 million in inflows overall. Short Bitcoin ETPs, however, saw significant outflows with $16 million (or 23% of their AuM) being withdrawn. The influx of funds into digital asset products comes after a period of market correction that led to a decrease of over $20 billion in total Assets under Management. The recent data indicates a growing interest from institutional investors in cryptocurrencies, particularly Bitcoin and Ethereum, through spot ETFs, despite market volatility and price fluctuations.
Overall, the trend of institutional investors increasing their Bitcoin ETF holdings in the U.S. highlights a growing confidence in the asset class and points towards a maturing market as more traditional financial institutions enter the cryptocurrency space. With major investment banks like Morgan Stanley and Goldman Sachs disclosing significant exposure to Bitcoin ETFs, the institutional adoption of cryptocurrencies seems to be on the rise. The recent rebound in digital asset market inflows, especially for Ethereum, following the launch of U.S. spot-based ETFs, further reinforces this positive sentiment among investors. As institutional players continue to navigate the crypto landscape, their long-term commitment to digital assets suggests a strategic outlook beyond short-term market fluctuations.
