Institutional investors owned over 20% of Bitcoin ETF shares at the end of March.
Yesterday marked the deadline for investment firms managing over $100 million in Bitcoin exchange-traded fund (ETF) shares to disclose their holdings, and the data shows that these newly launched ETF products are attracting significant interest from institutional players.
According to combined data from Fintel, over 1500 investment firms disclosed total ownership of around $10.6 billion in these ETFs. Of the ten spot Bitcoin ETFs, Grayscale Bitcoin Trust (GBTC), BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity Wise Origin Bitcoin Fund (FBTC), and ARK 21Shares Bitcoin ETF (ARKB) are the top choices for professional investors.
Hedge fund giant Millennium Management leads the pack with $1.97 billion worth of Bitcoin ETF shares, according to a recent 13F filing with the Securities and Exchange Commission (SEC).
Millennium is king of the bitcoin ETF holders w/ about $2b across four ETFs. This is out of over 500 holders (about 200x the avg for new ETF). Majority are inv advisors (60%) but a big dose of HFs (25%). Never can be totally sure what HFs up to but they were def big buyers. pic.twitter.com/iVtVXjhId0
— Eric Balchunas (@EricBalchunas) May 15, 2024
The fund’s investment portfolio includes $844 million shares in iShares Bitcoin Trust (IBIT), over $800 million in the Fidelity Wise Origin Bitcoin Fund (FBTC), about $202 million in Grayscale’s Bitcoin Trust (GBTC), and close to $45 million each in ARK 21Shares Bitcoin ETF (ARKB) and Bitwise Bitcoin ETF Trust (BITB).
However, the filing reveals that these holdings only account for 3% of Millennium’s $64 billion assets under management.
Other top Bitcoin ETF holders in Q1 following Millennium were Susquehanna International Group ($1.1 billion), Bracebridge Capital ($404 million), Boothbay Fund Management ($303 million), and Morgan Stanley ($269.9 million).
Breaking Records for New ETFs
According to Bitwise’s CIO Matt Hougan, the investment trend in Bitcoin ETFs is gaining momentum. The current level of institutional ownership is unprecedented for a new ETF. Traditionally, most ETFs see minimal participation from large investors in their initial months.
For instance, the gold ETF launch in late 2004 was considered wildly successful, amassing over $1 billion in its first five days. However, even at its first 13F filing, only 95 professional firms held positions in the gold ETF. By comparison, Bitcoin ETFs are experiencing a historic surge in terms of the sheer number of institutional investors involved.
While professional investors currently hold an estimated 20% of the total Bitcoin ETF assets, retail investors still dominate the landscape. However, Hougan noted that these early institutional allocations could be just the tip of the iceberg as institutional engagement deepens.
“…the allocations we see in recent 13F filings are just a down payment. Hightower Advisors may have $68 million allocated to bitcoin ETFs today, for instance, which is great, but it’s just 0.05% of their assets. If they follow the pattern outlined above, that allocation will build over time. And to put it in context, a 1% allocation of their portfolio to bitcoin would equate to $1.2 billion—all from a single firm,” Hougan stated.
“Multiply that by the growing number of professional investors participating in the space, and you can begin to see what’s behind my enthusiasm,” he added.
[Updated with Morgan Stanley’s holdings based on the latest data from Fintel]