Bitcoin ETF Boom: Bloomberg Uncovers Ownership By 1,950 Funds

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As a seasoned analyst with over two decades of experience in the financial markets, I’ve witnessed countless trends come and go. However, the recent surge of institutional interest in Bitcoin ETFs is unlike anything I’ve seen before. The sheer number of new funds diving into this arena is truly astounding, and it speaks volumes about the maturity and legitimacy that cryptocurrencies are finally gaining.

According to a recent Bloomberg report, newly established hedge funds, pension funds, and banking institutions have been buying into and consistently investing in the thriving Bitcoin ETF market that debuted in the U.S. earlier this year.

701 New Funds Enter Bitcoin ETF Arena

According to the most recent figures from Bloomberg, after the submission deadline for second-quarter 13F reports to the United States Securities and Exchange Commission (SEC), a total of 701 new investment funds have revealed their ownership in Bitcoin ETFs, bringing the grand total to approximately 1,950 entities holding such assets.

In this rising wave, institutions like Millennium Management, known for their involvement in multiple Bitcoin Exchange-Traded Funds (ETFs), are among the investors. Notably, Capula Investment Management and Steven Cohen’s Point72 Asset Management have also expressed interest in these Bitcoin ETFs.

The list of potential buyers includes a wide range of parties, such as the State of Wisconsin Investment Board, along with market players situated in significant financial centers worldwide, including Hong Kong, the Cayman Islands, Canada, and Switzerland.

Despite Bitcoin’s price dip of nearly 13% in the quarter, these spot Bitcoin ETFs have defied expectations, amassing a net inflow of $17 billion this year. BlackRock’s IBIT has emerged as a standout, with assets swelling to $20 billion. 

Institutional Winds Of Change

According to Noelle Acheson, writer of the Crypto Is Macro Now newsletter, the increasing number of Bitcoin ETF investors indicates strong investor confidence and thorough investigation.

On the other hand, even though the approval of Ethereum ETFs in July led to substantial investments, it’s important to mention that not every financial advisor is able to endorse these ETFs for their clients.

Acheson stated that this situation shows a combination of strong belief and investors carefully considering their decisions. At present, Morgan Stanley is the sole large brokerage firm allowing its financial advisors to suggest diversified Bitcoin Spot ETF investments. However, other firms are expected to follow suit, increasing demand and fostering a longer-term perspective.

As an analyst, I’ve observed a significant expansion in institutional adoption, extending not only to Bitcoin but also to Ethereum. The momentum behind Ethereum-based Exchange Traded Funds (ETFs) is undeniable, as these funds have garnered inflows amounting to approximately $1.9 billion. This figure excludes the $2.3 billion in outflows from the Grayscale Ethereum Trust (ETHE), which transitioned into an ETF last month.

Adam Guren, as the creator and head investment strategist at Hunting Hill Global Capital – a hedge fund that has previously declared investments in the IBIT ETF – emphasized the company’s foray into the digital currency sector dating back to 2016.

Guaren mentioned that a key part of their trading approach is supplying liquidity within the Exchange Traded Fund (ETF) market, with plans to expand their offerings in the U.S., potentially introducing crypto-based products such as Bitcoin and Solana ETF options. This development could open up additional avenues for their trading strategies.

Bitcoin ETF Boom: Bloomberg Uncovers Ownership By 1,950 Funds

In recent hours, the dominant cryptocurrency on the market has seen a drop of approximately 3%, causing its trading value to be around $56,700.

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2024-08-16 18:35