Institutional interest in Bitcoin exchange-traded funds (ETFs) reached a record high in the second quarter of 2024. According to recent data from Sam Baker, research analyst at Bitcoin investment firm River, 60% of the top 25 US hedge funds now hold Bitcoin ETFs.
Not only did hedge funds increase their exposure to Bitcoin ETFs during that period, but registered investment advisors (RIAs) did the same. This accumulation trend highlights how institutional investors are not bothered by Bitcoin price volatility.
Hedge funds and RIAs’ Bitcoin exposure
According to data, out of the top 25 US hedge funds, 15 are now holding shares of spot Bitcoin ETFs. These include three of the top five, i.e., Citadel Investment Group, Millennium Management, and Mariner Investment Group. However, the amount of Bitcoin they hold via these ETFs varies significantly.
At the top of the spectrum are Millenium with 27,263 BTC, Schonfeld Street Advisors with 6,734 BTC, and GS Asset Management with 6,202 BTC. Others, such as Balyasny and Bluecrest, hold 6 BTC and 9 BTC, respectively. The world’s largest hedge fund, Citadel, currently has 812 BTC through ETFs after adding 41 BTC in Q2.
Hedge funds and their BTC Exposure (Source: River)
Meanwhile, 13 of the US’s top 25 Registered investment advisors (RIAs) now have Bitcoin exposure. These include Cambridge Associates, Hightower Advisors, Cresset Asset Management, and Pathstone. Almost all the RIAs increased their BTC exposure in Q2.
Notably, none of these institutional investors sold their Bitcoin ETF holdings during the period. Instead, they increased their exposure. This meant that RIAs and hedge funds with over $1 billion in assets under management (AUM) saw their Bitcoin allocation grow by 18% and 46% in the second quarter of 2024.
Institutional investors bullish on BTC despite volatility
The increase in Bitcoin ETF exposure from institutional investors highlights their bullish sentiments about the asset despite its price volatility. In addition to hedge funds and RIAs, traditional investors such as banks, family offices, pension funds, and private equity are buying into Bitcoin ETFs.
Type of Institutional Investors holding Bitcoin ETFs (Source: CoinShares)
CoinShares head of research James Butterfill noted that major financial institutions’ 13F filings to the US Securities and Exchange Commission (SEC) showed their exposure.
He said:
“Looking from the top level, Investment advisors and Brokerages have the most AuM now at $4.7 billion and $1.5 billion respectively. This is followed by Hedge Funds and Holding companies with $3.8 billion and $1.1 billion respectively.”
Analysts from crypto market maker Wintermute also noted that based on 13F filings, there was a 28% Quarter-on-quarter increase in firms holding spot Bitcoin ETFs. This happened despite BTC falling more than 12% within that period, and it shows how investors are beginning to accept BTC along with its volatility.
