Despite recent fluctuations in bitcoin prices, institutional investors are showing strong resilience and commitment to their spot exchange-traded fund (ETF) holdings, according to industry analysts. This trend underscores the growing mainstream acceptance of bitcoin as a reliable investment asset, even amid significant market volatility.
André Dragosch, Head of Research Europe at Bitwise, highlighted data from recent 13F filings for Q2 2024, noting a solid commitment from institutional investors toward bitcoin-based ETFs compared to other asset classes like gold. “Institutional investors are not deterred by increased bitcoin volatility. Many are holding steady or even adding to their positions,” Dragosch.
The data revealed that among institutions who invested in spot bitcoin ETFs during the first quarter of 2024, 44% increased their holdings, 22% maintained stable positions, 21% slightly reduced their stakes, and only 13% fully exited. “Comparing this outcome to other ETFs, it’s clear that bitcoin ETFs are seeing sustained interest,” Dragosch added.
Wintermute analysts echoed this sentiment, noting that institutional traders remained unfazed by the nearly 20% decline in bitcoin prices during Q2 2024. “These institutions continued to accumulate bitcoin, further highlighting the growing institutional interest and acceptance of bitcoin as a key investment asset,” Wintermute analysts said.
Growing Engagement from Hedge Funds
Hedge funds are increasingly playing a significant role in the growing volume of spot bitcoin ETF trades. Over 60% of top global hedge funds now hold bitcoin through these ETFs, according to Dragosch. He pointed out that major hedge funds such as Millennium, Schonfeld, Boothbay, and Capula are among the leading holders of these products. “It’s fascinating to see hedge funds alongside pension providers and family offices in these filings,” he noted.
Dragosch also pointed to the involvement of pension funds, citing a recent U.S. Securities and Exchange Commission filing showing that the State of Wisconsin Investment Board holds over 2.8 million shares in spot bitcoin ETFs. Interestingly, the filing also revealed that the board has divested from Grayscale, signaling a shift in strategy toward more direct exposure to bitcoin.
As institutional interest continues to solidify, analysts expect that the broadening range of investors from hedge funds to pension providers will further drive mainstream adoption and acceptance of bitcoin, even in the face of market uncertainties.
