Crypto Institutions Buy Bitcoin ETFs for Billions, Storing 250,000 BTC
Institutional investors are buying Bitcoin exchange-traded funds (ETFs) while regular investors are sitting out. According to IntotheBlock, hedge funds and pensions are buying Bitcoin ETFs, while typical investors are apprehensive.
The debut of Bitcoin ETFs on the New York Stock Exchange in early 2024 let institutional money into the crypto market. This has let Bitcoin whales, investors with massive holdings, buy more bitcoin via these new financial instruments.
These whales have added 250,000 Bitcoins to their portfolios, putting them back to pre-FTX levels in 2023, according to IntotheBlock.
Hedge funds have fulfilled their promise as institutional adoption drivers. Millennium Management, a financial titan, has invested billions in Bitcoin ETFs, indicating its optimism for the cryptocurrency. Wisconsin's $160 million Bitcoin ETF investment is another public pension.
US ETF Frenzy Fails, But Journey Continues
US Bitcoin ETFs had a joyful start, with record inflows in January boosting the crypto market, but the celebration seems to be tapering down. The early spike may have been driven by a few passionate institutional users, say experts. Investors may be waiting since inflows have slowed in recent weeks.
The introduction of Bitcoin ETFs in Hong Kong was quiet across the Pacific. US ETFs debuted with $4.6 billion, but the first day of trading saw just $12.7 million. This lackluster response implies the Asian market may not be ready to embrace crypto yet.
Retail investors' lack of excitement complicates matters. The study shows a sharp drop in new Bitcoin addresses, a key retail participation statistic. This shows that many ordinary investors are skeptical of the recent spike or scared of bitcoin volatility.
This reluctance may have several causes. The FTX failure and early 2024 market slump may have soured investors. Retail investors may also be waiting due to ETF complexity and cryptocurrency trading novelty.
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