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News/"Tidal Wave" of Firms Pile Billions into Bitcoin ETFs

"Tidal Wave" of Firms Pile Billions into Bitcoin ETFs

Van Thanh Le

May 16 2024

4 weeks ago3 minutes read
Viking longship voyages stormy Bitcoin sea, institutional crew

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Bitcoin ETFs See Tidal Wave of Institutional Investors

Over 600 firms have piled into Bitcoin exchange-traded funds (ETFs), pouring a staggering $3.5 billion according to 13F filings with the SEC. Financial titans like Morgan Stanley, JPMorgan, and Wells Fargo are riding this crypto wave, alongside heavyweight hedge funds such as Millennium Management and Schonfeld Strategic Advisors.

Towering above the rest, Millennium Management has emerged as the ETF whale, plunging a colossal $1.9 billion across multiple vehicles, including BlackRock's iShares Bitcoin Trust and Fidelity's Wise Origin Bitcoin Fund. Not far behind, Schonfeld Strategic Advisors has staked a commanding $479 million, splitting $248 million into BlackRock's offering and $231.8 million into Fidelity's crypto basket.

The institutional onslaught doesn't stop there. Boothbay Fund Management has deployed $377 million, while Pine Ridge Advisers has allocated $205.8 million to spot Bitcoin ETFs. Meanwhile, Morgan Stanley maintains a $269.9 million stake in the veteran Grayscale Bitcoin Trust, and Apollo Management Holdings invests over $53 million in Ark Invest's ARKB.

This institutional blitz reached a crescendo in Q1, with over 900 entities disclosing Bitcoin ETF stakes exceeding $100 million each, amassing a staggering $10.7 billion, per The Defiant’s report. This tidal wave of institutional capital buoyed Bitcoin's market trajectory, propelling a near 6% price surge.

The financial influencer, Pivfund2100, indicates that Susquehanna International Group ranks second with over $1.23 billion worth of shares, and Horizon Kinetics follows with $907.8 million. The investment bank Morgan Stanley holds spot Bitcoin ETF shares worth $269.9 million. 

Around 60% of institutional spot Bitcoin ETF whales are investment advisors, while hedge funds make up 25% of the investors. Hedge funds were substantial buyers of the ETF shares.  

Grayscale and BlackRock emerge as institutional darlings, with 65% of investors clinging to the Grayscale Bitcoin Trust despite recent outflows, while 45% scooped up shares of BlackRock's coveted IBIT fund. Previously, Bitwise's Chief Investment Officer Matt Hougan forecasted such momentum will swell institutional investors in Bitcoin ETFs past 700, pushing total assets under management towards $5 billion.

Yet, this institutional embrace merely scratches the surface, representing just 7-10% of total ETF assets under management. As firms bolster their cryptocurrency allocations, the influx of institutional capital into this nascent asset class could intensify. The hedge fund Millennium Management's mammoth bet encapsulates nearly 3% of its $64 billion portfolio, signaling a resounding bullish conviction for Bitcoin's investment prospects.

Bitcoin ETF Inflows Top $303 Million

Amidst the tidal wave of institutional adoption in Bitcoin ETFs, these investment vehicles have witnessed remarkable performance and inflows.

U.S. spot Bitcoin ETFs achieved a two-week inflow high of $303 million on May 15, 2024, propelled by Bitcoin's soaring value surpassing $66,000. Powerhouse funds like Fidelity's FBTC and Grayscale's GBTC spearheaded this surge, with GBTC alone drawing $27 million, marking its first positive inflow day in a week.

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Source: Farside

Institutional heavyweights are doubling down on their crypto bets, revealing a steadfast confidence in this emerging asset class. The State of Wisconsin's Investment Board stands as a trailblazer, with $163 million staked across prominent ETFs like IBIT and GBTC – one of the first U.S. public pension funds to actively embrace cryptocurrency investments.

Governmental bodies are warming to the crypto craze, evidenced by Arizona's March 2024 bill encouraging state retirement plans to allocate to Bitcoin ETFs, signaling growing openness to integrating digital assets into traditional portfolios.

Since their January 11, 2024 inception, U.S. spot Bitcoin ETFs have amassed a staggering $12.1 billion in net inflows, underscoring their meteoric rise. Financial advisors have emerged as crucial stabilizing forces, steadily channeling capital into these vehicles while exercising prudent caution amidst market volatilities.

Tidal wave of [Bitcoin] symbols crashes on Wall Street.webp

Despite recent turbulence, industry experts from leading ETF issuers assert that institutional interest in Bitcoin remains robust within long-term investment strategies, albeit tempered. This measured approach reflects the maturing of cryptocurrencies as a mainstream asset class, poised for continued growth and integration into diversified portfolios.

On Thursday, spot Bitcoin Exchange Traded Funds (ETFs) recorded a significant $257.3 million, revealing a notable three-day uptrend. The Grayscale Bitcoin Trust (GBTC) soared with $4.6 million, BlackRock experienced a remarkable resurgence with $93.7 million, and other providers like Fidelity, Bitwise, ARK Invest, Invesco, Franklin, and Valkyrie also reported substantial inflows. These inflows signal a renewed interest in Bitcoin across institutional and retail investors.

Conclusion

The unrelenting tsunami of institutional capital flooding Bitcoin ETFs underscores cryptocurrencies' ascent into mainstream financial markets. While volatility persists, savvy investors recognize digital assets' potential, catalyzing an ETF revolution reshaping traditional portfolios. This tidal wave promises disruption – are you positioned to ride it?

FAQs

1. Which institutions invested the most in Bitcoin ETFs? 

Millennium Management deployed a staggering $1.9B, Schonfeld Strategic Advisors $479M, and Boothbay Fund Management $377M into various Bitcoin ETF products.

2. What was the total inflow into U.S. spot Bitcoin ETFs over a recent two-week period? 

U.S. spot Bitcoin ETFs attracted $303 million in inflows over a two-week span in mid-May 2024 as Bitcoin's price soared past $66,000.

3. How are governmental bodies responding to the crypto craze?

Arizona passed a bill in March 2024 encouraging state retirement plans to allocate to Bitcoin ETFs. The State of Wisconsin's Investment Board invested $163M across prominent ETFs.

4. What percentage of total ETF assets under management do Bitcoin ETFs represent?

Despite the massive inflows, Bitcoin ETF assets only account for 7-10% of the total ETF assets under management, signaling room for further growth.

This article has been refined and enhanced by ChatGPT.

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