During the second quarter, bitcoin was volatile, and prices of the largest digital currency declined. But data indicates professional investors, including hedge funds and institutional market participants, remain bullish on the cryptocurrency and related ETFs.
In a post on X (formerly Twitter) on Wednesday, Bitwise Asset Management Chief Investment Officer Matt Hougan noted that at the end of the second quarter, 1,924 institutional strategies owned bitcoin ETFs, such as the Bitwise Bitcoin ETF (BITB ). He noted that does not mean 1,924 individual institutional market participants own bitcoin ETFs. But even when double counting is factored in, there was a 30% increase in bitcoin ETF ownership among these investors from the first quarter to the second. Importantly, these investors aren’t being rattled by the crypto’s price swings.
“Most institutional investors who allocated in Q1 either held or bought more shares this spring. Among Q1 filers, 44% increased their position in bitcoin ETFs in Q2, 22% held steady, 21% decreased their position, and 13% exited. That’s a pretty good result, on par with other ETFs,” observed Hougan on X.
Hedge Funds Like Bitcoin ETFs, Too
In addition to traditional institutions, bitcoin ETFs — including BITB — have gained traction with wealth management firms. That’s confirmation that registered investment advisors are increasingly comfortable with modest allocations to the cryptocurrency in client portfolios. And that they like the idea of providing that exposure via the ETF wrapper, too.
Bitcoin ETFs are also being embraced by hedge funds. Hougan pointed out that the recent spate of Form 13F filings with the Securities and Exchange Commission indicates well-known hedge funds such as Boothbay, Capula, Millennium, and Schonfeld bought bitcoin ETFs during the April through June period.
Time will tell, but it’s possible that the ETF structure is making bitcoin more appealing to professional investors. And that could bring more advisors, family officers, and pensions into the market, thus adding more long-term investors.
“ETFs are a big tent that attract a wide variety of investors. It’s kind of great to see Millennium nestled up against the State of Wisconsin in these ETF filings. Over time, I’d like to see wealth managers and pensions account for a growing share,” added Hougan.
Regardless of the end user, the U.S.-listed spot bitcoin ETFs have been undisputed successes, as the smallest member of the group has $212.1 million in AUM following the group’s January debuts. For its part, BITB has $2.29 billion in AUM, making it one of the largest funds in the group.
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