Bitcoin has taken investors on a wild ride to start 2025. However, market participants may be able to find some solace in data confirming that professional investors remain supportive.
Moreover, recent data courtesy of CoinShares indicate professional money managers added to their holdings of spot bitcoin ETFs, including the CoinShares Valkyrie Bitcoin Fund (BRRR ), in the final three months of 2024.
“The latest round of SEC 13-F filings unveil significant growth in the institutional ownership of U.S. Bitcoin ETFs. As of Q4 2024, professional investors with over $100m under management hold $27.4 billion worth of Bitcoin ETFs, a 114% increase from the previous quarter’s $12.4 billion,” according to BRRR’s issuer. “This aligns with, yet outpaces, the overall expansion of the US Bitcoin ETF market, which climbed 77% quarter-over-quarter to $104.1 billion in total assets under management (AuM).”
Pros Love Bitcoin ETFs
Spot bitcoin ETFs came to market last year. This was considered a seminal event in the respective histories of cryptocurrency and ETF spaces.That’s not hyperbole. Fourth-quarter 13-F filings confirm professional investors now represent 26.3% of spot bitcoin ownership. This is a jump of 520 basis points from the end of the third quarter.
Products such as BRRR are filling voids for some professionals. These investors previously couldn’t access the cryptocurrency due to custody and security issues. Additionally, there’s diversity among the pros that are embracing bitcoin ETFs.
“Leading the charge are hedge funds and asset managers, whose combined holdings surpass those of all other institutional categories. Hedge funds alone now account for 41% of all 13-F Bitcoin ETF holdings, surpassing investment advisors for the first time,” added CoinShares.
Cryptocurrency ETF Penetration
There’s an interesting back-and-forth at the top in terms of the pros that own bitcoin ETFs like BRRR. For awhile, advisors led that pack, but hedge funds took the top spot in the fourth quarter. CoinShares points out that cryptocurrency ETF penetration in the hedge fund community is still small. Those market participants that do own products like BRRR often own sizable positions.
“Hedge funds overtook advisors as the largest institutional holders in Q4, representing 41% of all 13-F dollar holdings, up from 38% in Q3. While relatively small by number of holders, the largest allocations across all professionals are concentrated in a few hedge funds,” noted the issuer.
Granted, the aforementioned data points pertain to a concluded timeframe. However, outlook for ETFs such as BRRR could be positive. More institutional investors are expected to wade into crypto.
“Looking ahead, continued growth of institutional ownership seems likely, particularly as more managers receive due diligence approval and consider bitcoin exposure. Within these filings, the beginning of sovereign holders—with a position by one of the largest sovereign wealth fund in the middle east—is emblematic of Bitcoin’s investment potential,” concluded CoinShares.
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