Institutional Interest in Bitcoin ETFs Surges as Market Dynamics Shift
Institutional interest in Bitcoin (BTC) continues to grow, with K33 Research analysts reporting a significant increase in professional firms holding investments in U.S. spot Bitcoin exchange-traded funds (ETFs).
The number of such firms surged by 262 in the second quarter of 2024, reaching a total of 1,199.
While retail investors still dominate Bitcoin ownership, institutional investors have notably increased their market presence.
Their share of total assets under management (AUM) rose by 2.41 percentage points, hitting 21.15% in Q2.
Shifts in Institutional Preferences
Vetle Lunde, a senior analyst at K33 Research, noted a shift in institutional preferences within the Bitcoin ETF landscape.
Though the Grayscale Bitcoin Trust (GBTC) has seen a decline in institutional capital, other ETFs, such as Invesco Bitcoin Trust (IBIT) and Fidelity Bitcoin Trust (FBTC), have experienced a significant rise in “professional investor dominance.”
Market makers have emerged as the largest institutional Bitcoin ETF owners. However, notable investors like Millennium and Susquehanna have reduced their exposure, likely due to increased competition from new entrants such as Jane Street and lower trading profits amid calmer market conditions.
The annualized CME premiums closed at 8.6% on June 30, down from 14% on March 31. Despite this, renowned investor Paul Tudor Jones added a $30 million position in IBIT, signaling continued confidence in the market.
Institutional ownership of BTC ETFs grew solidly in Q2!
— Vetle Lunde (@VetleLunde) August 16, 2024
According to 13F filings, 1,199 professional firms held investments in U.S. spot ETFs as of June 30, marking an increase of 262 firms over the quarter.
While retail investors still hold the majority of the float,… pic.twitter.com/YanrZpfcCG
Institutional Appetite for Bitcoin ETFs Intensifies
Recent 13-F filings, which are quarterly reports required for investment managers with at least $100 million under management, reveal a dramatic increase in institutional holdings of Bitcoin ETFs.
According to a Coinbase report from August 16, institutional investors collectively invested $4.7 billion in Bitcoin ETFs during Q2 2024.
Financial giants like Goldman Sachs and Morgan Stanley significantly boosted their positions, while high-frequency trading firm DRW Holdings also made substantial investments.
Bitcoin’s Market Dominance Expands
Fueled by strong performance and significant inflows, Bitcoin’s market dominance continued to grow in July.
The cryptocurrency’s market capitalization relative to the overall crypto market expanded as spot Bitcoin exchange-traded products (ETPs) attracted approximately $3 billion in net inflows during the month, according to Grayscale’s August 1 monthly report.
While ETF inflows on August 15 saw over $11 million, it was overshadowed by cumulative outflows of $81.4 million recorded on August 14, according to Farside Investors.
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