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- Bitcoin ETFs have become more popular than gold ETFs among professional firms.
- Institutional investors now hold over $11 billion in Bitcoin ETFs, driven by the potential for high returns.
Exchange-traded funds (ETFs) backed by Bitcoin have surpassed traditional gold ETFs in popularity among professional firms, marking a dramatic transformation in the investment environment. This trend shows that institutional investors are becoming more confident about digital assets, as revealed by recent data.
Spot Bitcoin ETFs were present in the 13F filings of 937 professional firms in the US, a stark contrast to gold ETFs, which only saw investments from 95 firms during the same period. This data, shared by Vetle Lunde, senior analyst at K33 Research, highlights a pivotal shift towards cryptocurrency investments.
According to 13F reporting, 937 professional firms were invested in U.S. spot ETFs as of March 31. In comparison, gold ETFs had 95 professional firms invested in their first quarter (Bitwise).
Retail owns a majority of the float. Professional investors held exposure of $11.06bn… pic.twitter.com/jYEQZkpDiT
— Vetle Lunde (@VetleLunde) May 16, 2024
Despite retail investors holding the majority of Bitcoin ETF shares, professional investors’ exposure exceeded $11 billion by the end of the quarter. This amount constitutes 18.7% of the total assets under management (AUM) for Bitcoin ETFs. The appeal of Bitcoin ETFs among institutional investors is largely attributed to the potential for significant returns and the evolving perception of Bitcoin as a digital gold.
Prominent ETFs and Institutional Backing
Larger ETFs, such as ARKB and HODL, have seen substantial institutional backing, mainly due to allocations from prominent firms like ARK Invest and VanEck. Financial giants JPMorgan, UBS, and Wells Fargo are among the firms with notable Bitcoin ETF holdings. Additionally, the State of Wisconsin Investment Board reported holding over $99 million worth of BlackRock’s IBIT at the end of the first quarter.
These investments illustrate a growing trend of traditional financial institutions embracing digital assets. However, as Bloomberg ETF analyst James Seyffart highlighted, 13F forms represent a snapshot of holdings as of March 31 and do not account for short positions or derivatives.
The resurgence in ETF investments followed the release of US inflation numbers that met expectations. This economic stability prompted investors to increase their holdings in ETFs. Notably, nine ETFs collectively added 3,893 BTC to their portfolios, equating to nearly $256 million, as reported by Lookonchain on X. Grayscale’s GBTC, a prominent Bitcoin trust, saw an outflow of 839 BTC during this period. Conversely, Fidelity significantly boosted its holdings by adding 1,989 BTC. BlackRock’s IBIT is rapidly closing in on GBTC, trailing by less than 14,000 BTC with a total of 274,755 BTC under management.
U.S. Leads in Bitcoin ETF Investments
The United States stands out as the leader in Bitcoin ETF investments, with American firms contributing over $9.27 billion. Top U.S. banks like Morgan Stanley and Wells Fargo have made substantial investments, highlighting a major milestone in the integration of digital assets into conventional financial systems. In total, 898 U.S. institutional holders have reported investments across various Bitcoin ETF issuers.
Millennium Management has emerged as the largest institutional investor, with $2 billion invested in Bitcoin ETFs. Other notable firms include Susquehanna International Group (SIG) and Boothbay Fund Management. Boothbay has injected over $377 million into ETFs issued by major players such as BlackRock, Grayscale, Fidelity, and Bitwise. This significant participation by U.S. companies underscores the nation’s leadership in the expanding Bitcoin ETF market.
