Bitcoin ETFs are now held by over 60% of US Hedge Funds.
Up to 60% of top US hedge funds now hold Bitcoin ETFs, a sharp increase since May. This shift reflects growing institutional adoption as more traditional investors are attracted to crypto.
The US Securities and Exchange Commission's (SEC) decision in January to approve Bitcoin (BTC) ETFs was a milestone in institutional investors' direct access to the crypto market.
Hedge funds are flocking to Bitcoin ETFs.
60 percent of the largest US hedge funds now hold Bitcoin ETFs, said Sam Baker, a research analyst at River River who focuses on BTC. None of these funds sold off during Q2, with many continuing to increase their holdings.
Among the companies that added more shares in Q2 were Citadel Investments, Millenium Management, Mariner Investments and Fortress Investments. Additionally, 13 of the top 25 investment advisors (RIAs) in the US now have Bitcoin exposure through ETFs.
Moreover, they are gradually increasing some of their allocations, such as Cambridge Associates, Hightower Advisors, Moneta Group and Cresset Asset Management.
Read more: How to trade Bitcoin ETF: A step-by-step approach
Additionally, large institutions with more than $1 billion in assets under management (AUM) continue to increase their Bitcoin exposure. In Q2 alone, the number of registered investment advisors (RIAs) with bitcoin allocations grew by 18%.
Meanwhile, reflecting the growing confidence in Bitcoin among major financial players, hedge funds increased Bitcoin by 46%.
For hedge funds, the increase to 60% represents a significant increase, up 8% since May. As reported by BeInCrypto, 52% of hedge funds invested in Bitcoin ETFs as of May, allocating an average of 2.1% of their portfolios to BTC. This suggests that institutional enthusiasm for Bitcoin is increasing.
In fact, institutions have benefited greatly by buying the recent correction in the market and showing continued interest. According to capital manager HODL15Capital, BTC ETF flows have been positively positive in eight of the past ten days.
Amidst this growing demand, BlackRock's Bitcoin holdings are approaching 350,000 BTC, ranking behind Bitcoin creator Satoshi Nakamoto and Binance. Similarly, other issuers such as Bitwise, Ark Investments and Valkyrie Investments are actively looking for expansion opportunities.
Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030
Despite the role of ETFs in adding legitimacy to crypto, some argue that these financial instruments sidestep Satoshi's vision. The concern is that as institutional interests grow, power will shift back into the hands of large entities, which goes against crypto's decentralized ethos. This could lead to Bitcoin and other cryptocurrencies being traded under the influence of Wall Street, blurring the core principles of decentralization.
“I still wish Bitcoin didn't get an ETF. It moves slower than most stocks and has lost its trading appeal,” said one user on X.
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