TL;DR
- Institutional Interest Grows: In Q2 2024, 66% of institutional investors either maintained or increased their Bitcoin ETF holdings, with 44% expanding their positions.
- Steady Hands Amid Volatility: Despite a 14.5% drop in Bitcoin’s value, institutional investors showed resilience, with a 30% rise in holder/ETF pairs.
- Digital Asset Rebound: The digital asset market saw a significant rebound, with $176 million in inflows, driven by Ethereum’s strong performance and new U.S. spot-based ETFs.
Recent data from Bitwise reveals that an increasing number of institutional investors are enhancing their Bitcoin investments via U.S. spot exchange-traded funds (ETFs). In the second quarter of 2024, around 66% of these investors either held steady or expanded their Bitcoin ETF positions.
A few initial thoughts after reviewing the Q2 Bitcoin 13-F filings:
1) The Institutions Are Still Coming; Total Filings Are Up: I count 1,924 holder<>ETF pairs across all 10 ETFs, up from 1,479 in Q1. That's a 30% increase; not bad considering prices fell in Q2.
Of course, this…
— Matt Hougan (@Matt_Hougan) August 14, 2024
Bitwise’s analysis of 13F filings submitted to the SEC reveals that 44% of asset managers expanded their Bitcoin ETF holdings during the quarter, while 22% chose to hold steady. Meanwhile, only 21% of institutional investors reduced their positions, and a smaller 13% decided to exit entirely.
Bitcoin ETF Retention Trend “Intact”
Matt Hougan, Bitwise’s Chief Investment Officer, described the retention and growth in Bitcoin ETF holdings as a positive sign, comparable to trends observed with other ETFs.
Hougan emphasized the ongoing trend in an X post dated August 15, pointing out that institutional investors remain steadfast even with Bitcoin experiencing a 14.5% drop in value over the past quarter.
He also highlighted a remarkable rise in the number of holder/ETF pairs, which jumped from 1,479 in the first quarter to 1,924 in the second quarter, reflecting a 30% increase.
The uptick occurred even as Bitcoin prices fell, showcasing the steady hand of institutional investors who, unlike retail investors, are less likely to panic sell during periods of market volatility. Hougan remarked that evidence indicates institutional investors tend to remain steady rather than rush for the exits at the first hint of market volatility.
He further highlighted that prominent hedge funds like Millennium, Schonfeld, Boothbay, and Capula rank among the top holders of ETFs, joined by a wide range of advisors, family offices, and various institutional entities.
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.
Goldman Sachs also disclosed significant exposure, holding more than $238 million in shares of various spot Bitcoin ETFs, including the IBIT.
Digital Asset Products See Rebound
Last week, the digital asset market experienced a notable resurgence, attracting $176 million in inflows into investment products as investors took advantage of recent price declines.
This surge follows a market correction that had previously reduced the total Assets under Management (AuM) in these products by more than $20 billion. During the week, Ethereum emerged as the primary beneficiary of the market’s rebound, attracting $155 million in inflows last week.
Ethereum has seen impressive year-to-date inflows totaling $862 million, the highest investment level since 2021. This surge in interest is primarily due to the recent introduction of U.S. spot-based ETFs, which have significantly enhanced investor confidence in Ethereum.
In contrast, Bitcoin (BTC) experienced a week of ups and downs. Initially facing outflows, it turned the tide later in the week, finishing with a positive note of $13 million in inflows. Meanwhile, short Bitcoin ETPs saw substantial outflows, with $16 million (or 23% of their AuM) being withdrawn. At the time of writing, BTC is trading at $59,300, down nearly 2%.
