Institutional interest in Bitcoin ETFs surged significantly in the second quarter of 2024, according to analysts at K33 Research. The number of professional firms investing in U.S. spot Bitcoin exchange-traded funds (ETFs) increased by 262, bringing the total to 1,199—a clear sign of growing institutional participation in the crypto market.
Institutional Investors Boost Presence in Bitcoin ETF Market
The share of institutional investors in the total assets under management (AUM) for Bitcoin ETFs grew by 2.41 percentage points to 21.15% in Q2, reflecting a notable shift in market dynamics. While retail investors still dominate Bitcoin ownership, institutions are increasingly reshaping the landscape.
Vetle Lunde, a senior analyst at K33 Research, observed that institutional capital has been shifting away from the Grayscale Bitcoin Trust (GBTC) towards other ETFs like the Invesco Bitcoin Trust (IBIT) and Fidelity Bitcoin Trust (FBTC). This shift underscores a growing preference for these ETFs among professional investors.
Market Makers Lead Institutional Bitcoin ETF Ownership
Market makers have emerged as the largest institutional holders of Bitcoin ETFs. However, some well-known investors, including Millennium and Susquehanna, have reduced their exposure, likely due to increased competition and lower trading profits in calmer market conditions. The annualized CME premiums, for instance, dropped from 14% on March 31 to 8.6% by June 30.
Despite some reductions in exposure, there were positive developments as well, such as renowned investor Paul Tudor Jones adding a $30 million position in IBIT, indicating continued confidence in Bitcoin’s potential.
Growing Appetite for Bitcoin ETFs Among Institutions
Recent 13-F filings, which are quarterly reports required for investment managers with over $100 million under management, show a dramatic increase in institutional holdings of Bitcoin ETFs in Q2 2024. Collectively, these filings revealed a total investment of $4.7 billion in Bitcoin ETFs, with significant contributions from financial giants like Goldman Sachs, Morgan Stanley, and high-frequency trading firm DRW Holdings.
Bitcoin’s Market Dominance Expands with Institutional Inflows
Bitcoin’s market dominance continued to grow in July, fueled by strong performance and substantial institutional inflows. According to Grayscale’s August 1 report, spot Bitcoin exchange-traded products (ETPs) attracted approximately $3 billion in net inflows during the month, further solidifying Bitcoin’s position in the broader crypto market.
Despite positive ETF inflows of over $11 million on August 15, this figure was overshadowed by the significant outflows of $81.4 million recorded on August 14, indicating the volatility and shifting dynamics within the market. As institutional interest in Bitcoin ETFs intensifies, Bitcoin’s influence in the crypto space continues to strengthen, reflecting its growing appeal as a mainstream investment.
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