ETFs
Who buys Bitcoin ETFs? Bitwise CIO shares insights
In a new noteBitwise Chief Investment Officer Matt Hougan offered a detailed analysis of early adopters of Bitcoin exchange-traded funds (ETFs) based on 13F filings with the SEC. His ideas highlight significant adoption of Bitcoin ETFs by professional investment firms, heralding a potential shift in the BTC investment landscape.
Since their launch On January 11, Bitcoin ETFs captured an impressive $11.7 billion in assets, making it the most successful ETF launch in the annals of financial products. This explosive start aroused widespread interest in the identity of investors, whether they were mainly individuals or professionals.
Who buys Spot Bitcoin ETFs?
Hougan’s memo provides a clear answer. “Many professional investors own Bitcoin ETFs,” he said. These are not just any investors; they are among the most respected and largest asset managers in the industry. For example, Hightower Advisors, ranked the second-largest RIA firm in the United States by Barron’s and managing $122 billion in assets, now owns $68 million in Bitcoin ETFs. Similarly, Bracebridge Capital, a leading Boston-based hedge fund that manages endowments for institutions like Yale and Princeton, invested a whopping $434 million.
Other significant stakeholders include Cambridge Investment Research with $40 million, Sequoia Financial Advisors with $12 million, Integrated Advisors with $11 million, and Brown Advisory with $4 million in Bitcoin ETF holdings. In total, according to the latest data from last Thursday, 563 professional investment firms reported owning a total of $3.5 billion in Bitcoin ETFs. Hougan predicts that by Filing deadline May 15these numbers could reach more than 700 companies with total assets under management close to $5 billion.
“It’s absolutely huge,” Hougan said. “For any financial advisor, family office or institution wondering if they are the only one considering exposure to Bitcoin, the answer is clear: you are not alone.”
From a historical perspective, the scale of professional investor ownership has been described as unprecedented. Eric Balchunas, senior ETF analyst at Bloomberg, called the number of large-scale investors involved in Bitcoin ETFs “crazy.” By comparison, when Gold ETF Launched in late 2004 – a launch previously considered the most successful of all time – they attracted more than $1 billion in just five days. However, their first 13F filings showed that only 95 professional companies were investing. In contrast, Bitcoin ETFs have significantly surpassed this mark upon their initial filings.
Despite this surge in professional interest, Hougan’s note cautions that the total $50 billion in assets under management in Bitcoin ETFs still has a substantial portion held by retail investors. He estimates that professional investors currently represent only 7-10% of all assets. However, he suggested that the media portrayal of these ETFs as “retail-focused” funds could overlook a critical emerging trend.
“Most investors follow a familiar pattern,” Hougan said, describing a typical four-stage investment trajectory seen among institutions. First, there is a due diligence period lasting 6 to 12 months. Subsequently, professionals could make a small personal allocation to test the waters before recommending larger allocations to their clients. Ultimately, this leads to more substantial platform-wide allocations across their entire client portfolio, typically ranging from 1-5% of the portfolio.
Given this information, Hougan remains “incredibly” optimistic about the future of Bitcoin ETFs. He concluded: “The allowances we see in recent 13F filings are just a down payment. » He pointed out that companies like Hightower Advisors, with a current allocation of 0.05%, could potentially significantly increase their investments. “Multiply that by the growing number of professional investors participating in the space, and you can start to see what’s behind my enthusiasm.”
Remarkably, yesterday, after Hougan released the memo, there was probably the most significant 13F disclosure for Bitcoin to date. Wisconsin State Investment Council reported purchase of $99,167,688 (2,450,400 shares) of IBIT from BlackRock and $63,687,310 (1,013,000 shares) of GBTC from Grayscale.
At press time, the BTC price stood at $61,940.
Featured image created with DALL·E, chart from TradingView.com