Surge in Bitcoin ETF Holdings Reflects Institutional Confidence

Institutional investors kept or increased their Bitcoin ETF holdings during Q2 2024 despite a 14.5% drop in Bitcoin's price.

Institutional investors largely maintained or increased their Bitcoin ETF holdings in Q2 2024, despite a decline in BTC’s price.

According to 13F filings with the U.S. Securities and Exchange Commission, 66% of institutional holders either held steady or added to their U.S.-based spot Bitcoin ETF positions.

Among asset managers, 44% increased their holdings, while 22% maintained their existing stakes.

“It’s a pretty good result, and it shows that there continues to be demand from institutional investors, even with the market volatility,” Bitwise Chief Investment Officer Matt Hougan told CoinDesk.

Institutions’ ‘Diamond Hands' Holding Strong Despite Market Woes

The number of institutional holders and ETF pairs also increased by 30% from Q1, growing from 1,479 to 1,924 in Q2.

This occurred despite a decline in BTC’s value. As Hougan noted, institutional investors largely demonstrated “diamond hands,” a term used to describe holding assets through a market downturn without panic selling.

Hedge funds remained at the forefront of Bitcoin ETF investments, with major players like Millennium, Schonfeld, and Boothbay emerging among the top holders.

“It’s not just hedge funds, but a broad range of institutional investors, including family offices and wealth managers,” Hougan said, underscoring the diverse nature of institutional participation.

“I think that’s really healthy for the ETF market because it’s bringing a diverse set of participants into the bitcoin market.”

The analysis also showed that 13% of institutional investors exited their positions, while 21% reduced their holdings. However, the majority displayed a steady commitment to their Bitcoin ETF investments.

This resilience contrasts with the behavior typically seen among retail investors, who often react to volatility by liquidating assets.

On Aug. 14, trading volume for spot Bitcoin ETFs reached $1.2 billion, up from $1.18 billion the previous day.

Despite the increase in trading activity, Bitcoin experienced volatility, with its price dropping 3% within an hour after briefly surpassing $61,000. The price later recovered slightly to $58,530, down 4.35% over the past 24 hours.

Major Financial Institutions Opt for BTC ETFs

Both Morgan Stanley and Goldman Sachs increased their exposure to Bitcoin ETFs in Q2.

Morgan Stanley reported owning over 5.5 million shares of BlackRock’s iShares Bitcoin Trust (IBIT), valued at $188 million as of June 30. This positioned the bank among the top five IBIT fundholders.

Goldman Sachs, meanwhile, held more than $238 million in shares of IBIT and other spot Bitcoin ETFs.

The continued investment from major financial institutions highlights the growing significance of Bitcoin ETFs in the financial ecosystem.

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