According to a report from research site K33 Research, institutional adoption of Bitcoin ETFs increased by 21% in the second fiscal quarter, due to an additional 262 companies investing in them alongside major market makers.
Institutional interest in Bitcoin (Bitcoin-BTC) continues to grow, according to K33 Research analysts, with a report indicating that the number of investment firms that have investments in Bitcoin ETFs in the United States increased during the second quarter of 2024 by 262 companies for a total of 1,199 companies.
While small investors continue to dominate BTC ownership, institutional investors continued to significantly increase their investments in BTC, with the total value of assets under management (AUM) rising by 2.41% to 21.15% in the second quarter.
Institutional Investors Reshape Bitcoin ETFs
Vetle Lunde, senior analyst at K33 Research, highlighted changing institutional investment preferences within the Bitcoin ETFs: while institutional investments in Grayscale’s Bitcoin Trust (GBTC) fell and other ETFs such as the Invesco (NYSE:IVZ) Bitcoin Trust (IBIT) and Fidelity Bitcoin Trust (FBTC) saw a significant increase in “professional investment firm dominance.”
Source: K33 Research Market makers have emerged as the largest institutional owners of Bitcoin ETFs, as prominent investors such as Millennium and Susquehanna cut their ETFs. This is likely due to the entry of new investment competitors such as Jane Street, the stability of market conditions and the consequent decline in corporate profitability from trading activity, as “the earnings of annual futures contracts opened on the Chicago Mercantile Exchange (CME) closed on June June 30 at 8.6%, down from 14% on March March 31.”
Despite the overall declining trend, the analyst pointed to a positive development that emerged with the initiative of the famous investor Paul Tudor Jones to invest $ 30 million through Fidelity’s IBIT fund.
Growing appetite to invest via Bitcoin ETFs
According to the weekly Coinbase (NASDAQ:COIN) raeport released on August August 16, reports released under the F13 disclosure form showed growing interest in investing in Bitcoin Spot ETFs.
F13’s quarterly reports on investment management firms managing assets with a total value of at least $100 million provide an overview of the status of major market players, the latest of which revealed that institutional holdings of Bitcoin ETFs increased significantly during the second quarter of 2024 to a total of $4.7 billion. Several banking giants – notably Goldman Sachs and Morgan Stanley – have increased their investments in Bitcoin ETFs, and DRW Holdings, which is famous for using advanced automated trading software, has invested heavily in the market.
Bitcoin’s dominance in the sector is increasing amid successive institutional investments
Thanks to its strong performance and massive investment, Bitcoin’s dominance in the cryptocurrency sector continued to increase during the July July, and Bitcoin’s market capitalization increased relative to the total value of cryptocurrencies after Bitcoin’s investment products (ETPs) attracted net inward investments of $3 billion in a month, according to Grayscale’s monthly report released in early August August.
Chart showing Bitcoin continued to grow in dominance, Source: Grayscale Investments Finally, according to Farside Investors’ report, Bitcoin ETFs have seen positive developments with net investments of more than $11 million on August August 15, but well below the total net outward investment of $81.4 million on August August 14.
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