The first quarter of 2024 marks a turning point for Bitcoin ETFs, with institutional investors significantly increasing their holdings. Recent reports indicate that over 1,500 investment firms now hold substantial shares in these products.
Massive Influx of Institutional Investments
Data from Fintel shows that by the end of March, firms managing over $100 million in Bitcoin ETFs had accumulated about $10.6 billion in assets. Popular ETFs include the Grayscale Bitcoin Trust (GBTC), BlackRock’s iShares Bitcoin Trust (IBIT), the Fidelity Wise Origin Bitcoin Fund (FBTC), and the ARK 21Shares Bitcoin ETF (ARKB).
Leading the pack is hedge fund giant Millennium Management, with nearly $2 billion invested in various Bitcoin ETFs. Susquehanna International Group follows with $1.1 billion in these products. Other major investors include Bracebridge Capital ($404 million), Boothbay Fund Management ($303 million), and Morgan Stanley ($269.9 million).
Although these investments represent only a small portion of the total assets managed by these firms, they signal a significant shift in the market.
Unprecedented Records for New Products
Matt Hougan, Chief Information Officer of Bitwise, highlighted that this level of institutional holding is remarkable for newly launched ETFs. For context, the popular Gold ETF attracted only 95 professional investors in its first filing in 2004, despite raising over a billion dollars in its first five days.
While retail investors are still the majority, institutions now hold about 20% of Bitcoin ETF assets. Hougan believes this is just the beginning:
“Current allocations are just an initial step. Hightower Advisors might have $68 million allocated today, only 0.05% of its assets. Following trends, this will increase over time. A 1% allocation would mean $1.2 billion for this single firm. Multiply that by the growing number of participants, and you understand my enthusiasm.”
Key Milestone in Crypto Adoption
The growing interest of professional investors in Bitcoin ETFs marks a significant milestone in the wider acceptance of cryptocurrencies. As regulators continue to approve more Bitcoin-backed investment products, institutional capital is expected to increase, potentially driving BTC prices to new heights.
Featured image from: news.bitcoin.com.com