ETF
12% Bitcoin dip, while institutional Bitcoin ETF holdings rise 14%
Institutional interest in Bitcoin exchange-traded funds (ETFs) rose 14% in the second quarter of 2024, despite a decline in Bitcoin’s value by 12% within the same period.
Matt Hougan, Chief Investment Officer at Bitwise, who disclosed this, noted that despite the significant dip in Bitcoin’s price, institutional investors remained undeterred.
According to him, “The decline in Bitcoin’s value did not drive institutions away. Rather, their commitment grew stronger.”
Indeed, the increasing institutional involvement is particularly striking, with investors in Bitcoin ETFs rising from 965 to 1,100, representing 14% growth.
These investors now manage 21.15% of the total assets in Bitcoin ETFs, up from 18.74% in the previous quarter. By the end of Q2, institutional investments in Bitcoin ETFs had reached $11 billion.
This growth is said to be reminiscent of early trends seen with traditional ETFs.
Hougan compared the rapid uptake of Bitcoin ETFs to the early growth of Invesco’s QQQ ETF, noting that Bitcoin ETFs have attracted three times as many institutional buyers in just two quarters.
Despite some exits—112 investors left their Bitcoin ETF positions—247 new firms entered the market, resulting in a net gain of 135 institutional investors.
Notably, Bitwise’s Bitcoin ETF, ranked fourth in assets under management, now has more institutional holders compared to SPDR’s GLD ETF at a similar stage of its development.
Looking ahead, Hougan predicts a continued increase in institutional exposure to Bitcoin. Currently, the average institutional portfolio allocates just 0.47% to Bitcoin, but this is expected to rise to over 1% within a year.
Hougan is said to anticipate that as momentum builds, institutional investment could eventually reach up to 5% of their portfolios.
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