Hedge funds, pension funds, and banks are increasingly allocating capital into exchange-traded funds (ETFs) that invest directly in Bitcoin, signalling a broader acceptance of the cryptocurrency among traditional investors according to a report released on August 15. This trend has been catalyzed by U.S. regulators, who, albeit reluctantly, pushed Bitcoin ETFs into the mainstream earlier this year.
One of the most prominent institutional buyers is Millennium Management, a hedge fund managing $68 billion in assets. Despite reducing its stakes in several Bitcoin ETFs during the second quarter, Millennium remains the top holder in many of these funds, including BlackRock’s iShares Bitcoin Trust (IBIT). The firm’s continued investment reflects a growing confidence in Bitcoin as a legitimate asset class.
More Players Joining the Bitcoin ETF Madness
Significant investments in Bitcoin ETFs have also been disclosed by other prominent hedge fund participants, including Schonfeld Strategic Advisors, Capula Investment Management, and Steven Cohen’s Point72 Asset Management.
Hedge funds are not the only institutions showing interest; the State of Wisconsin Investment Board and market makers from Hong Kong, the Cayman Islands, Canada, and Switzerland are among the other regions that have jumped into the game.
A Bloomberg examination of second-quarter SEC filings reveals that 701 new entities disclosed stakes in spot Bitcoin exchange-traded funds (ETFs), increasing the total count of these holders to close to 1,950.
Although the price of Bitcoin has dropped by about 13% for the quarter, there has been a notable increase in the number of new institutional investors. This pattern persists although many financial advisors are still prohibited from endorsing Bitcoin ETFs to their customers.
Spot Bitcoin ETFs debuted in January and have seen net inflows of $17 billion so far this year, above initial projections. With remarkable performance, BlackRock’s iShares Bitcoin Trust has grown quickly to become a $20 billion fund. The accessibility of these ETFs has facilitated Bitcoin trading for regular investors.
Bitcoin ETFs Making it a Big Hit
BlackRock, the largest asset manager in the world, has become a dominant player in the Bitcoin ETF market, thus its entry into the cryptocurrency field is a significant milestone. In less than a year, BlackRock’s IBIT might overtake the holdings of Bitcoin’s enigmatic founder, Satoshi Nakamoto, if the present rate of accumulation continues.
One of the biggest wealth management companies in the world, Morgan Stanley, has revealed plans to let its financial advisors market Bitcoin ETFs to a specific clientele, indicating yet another step towards the mainstreaming of cryptocurrencies in finance.
This action marks a substantial advancement in traditional financial institutions’ acceptance and implementation of cryptocurrencies.