In a revealing social media post on August 14, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, shared his initial analysis of the Q2 Bitcoin ETF 13-F filings with the U.S. SEC. Let’s dive into the key takeaways from Hougan’s observations.
Institutional Interest Continues to Grow
Despite a downturn in Bitcoin prices during Q2, Hougan reports a significant increase in institutional involvement with spot Bitcoin ETFs. He notes a 30% rise in the number of holderETF pairs, jumping from 1,479 in Q1 to 1,924 in Q2 across all ten spot Bitcoin ETFs.
It’s essential to understand what Hougan means by “holderETF pairs.” This term refers to each instance of an institution holding a position in a specific spot Bitcoin ETF. For example, if Institution A invests in three different spot Bitcoin ETFs, it would count as three holderETF pairs. This metric helps gauge overall institutional engagement with spot Bitcoin ETFs, even if it doesn’t directly translate to the number of unique institutions involved.
Hougan clarifies that this doesn’t necessarily equate to 1,924 unique institutions, as some investors may report positions in multiple ETFs. However, he emphasizes that this “double-counting” aspect applies equally to both Q1 and Q2 numbers, making the percentage increase a meaningful indicator.
The takeaway? Institutional adoption of Bitcoin ETFs continued its upward trajectory in Q2, demonstrating resilience in the face of market volatility.
Institutions Demonstrate “Diamond Hands”
One of the most intriguing insights from Hougan’s analysis is the behavior of institutions that allocated to spot Bitcoin ETFs in Q1. Contrary to fears of institutional panic selling, the data paints a picture of steadfast investment strategies. Hougan reports that 44% of Q1 filers increased their positions in Q2, while 22% maintained their positions. Only 21% decreased their holdings, and a mere 13% exited their positions entirely.
Hougan notes that this distribution is comparable to investment patterns seen with other ETFs, suggesting that institutional investors in spot Bitcoin ETFs are displaying typical investment behavior rather than speculative fervor. This “diamond hands” approach, as it’s colloquially known in the crypto community, indicates a long-term commitment from many institutional investors.
Hedge Funds Remain Prominent, But Diversity Is Increasing
Examining the top holders of most spot Bitcoin ETFs reveals a strong presence of major hedge funds. Hougan specifically mentions Millennium, Schonfeld, Boothbay, and Capula as examples. However, he also points out a growing diversity in the investor base, including advisors, family offices, and select institutional investors.
Hougan expresses enthusiasm about this diversity, noting the juxtaposition of entities like Millennium alongside the State of Wisconsin in ETF filings. He sees this as a positive sign of Bitcoin ETFs attracting a wide range of institutional investors.
Looking ahead, Hougan expresses a desire to see wealth managers and pension funds accounting for an increasing share of spot Bitcoin ETF investments, suggesting that such a trend would indicate broader institutional acceptance.
Caution on AUM Reports
As a final note, Hougan advises caution regarding Assets Under Management (AUM) reports until all filings are complete. He mentions that some large investors had yet to file their reports at the time of his post, which could significantly impact total AUM figures.
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