The bitcoin (BTC) spot ETFs in the United States generated high expectations prior to their launch and, without a doubt, have exceeded the projections of locals and strangers due to their good performance four months after becoming operational. A clear example of the importance of digital currency through exchange-traded funds is that public, state organizations, private companies and even large banking entities that came to criticize bitcoin, now have exposure to this asset. ETFs are characterized by allowing investors to gain exposure to the price of bitcoin without having to interact directly with it. This means that those who purchase the ETF are not truly purchasing and managing the crypto asset. So far, bitcoin-based exchange-traded funds have generated net inflows of $12 billion, and the presence of institutional investors in the funds has boosted that. The preference of many companies for ETFs was demonstrated in the 13F forms, the quarterly portfolio report that companies are required to publish before the United States Securities and Exchange Commission (SEC).
The top 10 bitcoin ETF investors
In the following image The largest investors who entered the bitcoin ETF market are shown. It is made based on data from 13F forms by Julian Fahrer, who is the founder of the Heyapollo platform and a specialist in institutional investments in cryptocurrencies.
Top companies that invested in bitcoin ETFs. Source: Julian Fahrer.
1. Millennium Management
First, there is Millennium Management, an investment management firm located in New York, which has so far invested $2 billion in ETFs, equivalent to 30,185 BTC. Millennium Management accessed four of the 11 publicly traded ETFs, according to its 13F form. The largest acquisition of shares He made it to the fund managed by BlackRock, iShares Bitcoin Trust (IBIT), for a value of 786 million dollars. It was followed by a $752 million investment in the Fidelity-managed fund, Fidelity Wise Origin Bitcoin Fund (FBTC); $188 million in the ETF issued by Grayscale, Grayscale Bitcoin Trust (GBTC); $41.8 million in the fund issued by ARK Invest, ARK 21Shares Bitcoin ETF (ARKB); and $41.5 million in the Bitwise company fund, Bitwise Bitcoin ETF (BITB). Bloomberg Intelligence's Eric Balchunas commented that more than 500 companies chose to invest in the funds. According to his estimates, This is 200 times the average number of investors that a new ETF normally generateswhich denotes the great reception that these financial instruments have had.
2. Susquehanna International Group
Second is Susquehanna International Group. This Pennsylvania-based global trading and technology company invested $1.1 billion in a wide variety of bitcoin ETFs, equivalent to 16,601 BTC. Most of the holdings are from the $1 billion GBTC fund. The rest was divided between 8 funds, highlighting Valkyrie Bitcoin Fund (BRRR); Invesco Galaxy Bitcoin ETF (BTCO); Franklin Bitcoin ETF (EZBC); VanEck Bitcoin Trust (HODL), as well as ARKB, BITB, IBIT, and FBTC.
One of the corporate buildings of the Susquhanna group. Source: TheRockBrook.
3. Horizon Kinetics
The third position is held by Horizon Kinetics, an investment manager based in New York. This company has holdings in ETFs that reach $988 million, equivalent to 14,908 BTC. The investments are distributed between GBTC and IBIT with 961 million dollars and 27 million dollars, respectively.
4. Bracebridge Capital
Fourth place is achieved by Bracebridge Capital, a Boston-based hedge fund whose investment in bitcoin exchange-traded funds amounts to $404 million, equivalent to 6,097 BTC. This company invested in three ETFs: ARKB received $285 million, IBIT $93 million, and GBTC $24 million.
5. Boothbay Fund Management
In fifth place is Boothbay Fund Management, a company located in New York that offers wealth management and advisory services. Its holdings in ETFs reach $303 million, equivalent to 4,573 BTC. Of that total, it allocated $139 million to IBIT, $64 million to GBTC, $50 million to FBTC and $48 million to BITB.
6.Morgan Stanley
Sixth place goes to what is probably the most recognized company on the list: Morgan Stanley. It is an American bank that manages more than $1.2 trillion in assets under management, and whose headquarters are located in New York. It acquired $251 million in shares in GBTC, equivalent to 3,788 BTC. It is striking that several banks are investing in bitcoin ETFs, considering that years ago they declared against the digital currency.
Morgan Stanley headquarters, in the United States. Source: stock.adobe.com
7. Ark Investment Management
The seventh position is held by Ark Investment Management, a company located in Florida, with a holding of 192 million dollars in shares of its own ARKB bitcoin fund, equivalent to 2,897 BTC. Cathie Wood, founder and CEO of the company, is one of the promoters of bitcoin in the market, and hopes that by 2030 the price of the currency will be above 1 million dollars.
8. Aristeia Capital
Eighth place was achieved by Aristeia Capital, an investment management company based in Connecticut. It only bought shares of the IBIT fund for around $152 million, equivalent to 2,294 BTC.
9. State of Wisconsin
The ninth position is extremely striking. This is the State of Wisconsin, which invested $151 million in two ETFs, equivalent to 2,278 BTC. The share purchase was divided into $92 million to IBIT and $59 million to GBTC. The acquisition was made through the Wisconsin State Investment Board (SWIB), as reported by BitcoinDynamic.
Wisconsin is located in the north of the United States of America – Source: Wikipedia.
10. HBK Investments
Finally, in the top 10 largest investors in bitcoin through ETFs is HBK Investments. This is an alternative investment manager based in Texas. The company purchased shares of 4 ETFs worth $105 million, equivalent to 1,584 BTC. The distribution was: 49 million dollars; $23 million for BITB; $18 million for ARKB; and $13 million for GBTC.
“Digital gold” prevails in the market
Vetle Lunde, analyst at K33 Research, made a comparison of the number of investors between bitcoin and gold ETFs in their first quarter, as can be seen in the following graph.
Comparison between BTC and gold ETFs. Source: K33 Research. According to 13F forms, 937 companies invested in bitcoin ETFs, while gold-based ETFs garnered investment from only 95 companies. This is interesting if one takes into account that bitcoin is considered by many to be a kind of digital gold. As can be seen, this “digital gold” is achieving much faster adoption in the stock market than physical gold ETFs. which were launched in 2004. This could be due to several reasons, such as the prospect of higher long-term returns, portfolio diversification, or the perception of bitcoin as a better store of value than gold. For his part, Matt Hougan, chief investment officer at Bitwise, commented that the launch of bitcoin ETFs has been the “most popular of all time.” In his opinion, “the big news” is that many professional investors now own bitcoin ETF shares. He highlights that the allocations that are in the recent 13F presentations They are just a “down payment” and that allocation will increase over time.
“To put it in context, a 1% allocation of a portfolio to Bitcoin would be equivalent to $1.2 billion, all from a single company. Multiply that by the growing number of professional investors participating in the space and you can start to see what's behind my enthusiasm.” Matt Hougan, chief investment officer at Bitwise.
BlackRock, the favorite bitcoin ETF
The bitcoin ETF that was best accepted by investors, as can be seen in the aforementioned data, was IBIT, from BlackRock. This ended with 414 institutional holders reported in the first quarter. Investment fund specialist Eric Balchunas considers this “amazing” and points out that Having 20 institutional owners when it is such a young financial product is something “very rare”. Below is a comparison between bitcoin ETFs and other ETFs launched in January this year.
Number of companies that invested in ETFs in the first quarter of 2024. Source: Bloomberg. As can be seen, the preference for the IBIT fund is considerably higher than the rest of the ETFs launched in January. In any case, although the reception of investors in ETFs such as FBTC, BITB and ARKB is lower, They continue to be well above ETFs based on other types of assets. IBIT's good performance should not be surprising given that BlackRock is the largest asset management company in the world. It has $10.5 trillion in assets under management. This is almost 1.4 trillion more than in March 2023. The strength of a company of that level has led to its bicoin ETF since Its launch has had 71 days with numbers in green, which led it to be part of the select «club» of the 10 ETFs with the most days of positive net capital flows, as reported by BitcoinDynamic. Furthermore, at the beginning of March this ETF joined another select club: that of the few ETFs that manage more than $10 billion. IBIT was the investment fund, not only for bitcoin but in all of history, that reached such a figure the fastest.
What impact will this institutional adoption have on bitcoin?
If this trend continues, it will be bullish for the price of bitcoin due to the operation of spot ETFs, which are backed by the underlying asset. Unlike futures ETFs, which are based on future contracts and do not require the direct purchase of bitcoin, Spot ETF management companies must purchase and hold bitcoin in their treasuries to back their shares.
This process of acquiring bitcoin to support spot ETFs creates direct and tangible demand in the market. As more investors put money into these funds, the entities that manage the ETFs must acquire more bitcoin to maintain adequate support. This, in turn, reduces the amount of bitcoin available on the open market, which can lead to an increase in price due to limited supply. Additionally, the participation of large banks and corporate investors in these ETFs indicates growing institutional interest in bitcoin. The influx of institutional capital not only brings large sums of money to the market, but can also increase confidence in bitcoin as a legitimate and valuable asset. This additional legitimacy can attract even more investors, both institutional and retail, creating a positive cycle of investment and price increases.