Institutional investors’ interest in U.S. spot Bitcoin (BTC) ETFs has remained strong, even amid the digital asset's price fluctuations and volatility in the second quarter.
Bitwise’s Chief Investment Officer, Matt Hougan, noted that the accumulation trend observed following the debut of these products in the first quarter continued into Q2, with a notable 30% increase in holders. Hougan stated,
“I count 1,924 holders ETF pairs across all 10 ETFs, up from 1,479 in Q1. That’s a 30% increase; not bad considering prices fell in Q2…Institutional investors continued to adopt bitcoin ETFs in Q2. The trend is intact.”
Institutions Hold Steady Through Q2 Decline
Hougan further highlighted that 66% of professional investors who purchased these products in Q1 either maintained or increased their holdings in Q2.
“Among Q1 filers, 44% increased their position in bitcoin ETFs in Q2, 22% held steady, 21% decreased their position, and 13% exited. That’s a pretty good result, on par with other ETFs.”
This trend defied the expectation that institutional investors might sell off in response to any significant volatility or downturn. For context, Bitcoin experienced a 12% drop in Q2, falling from $72K to $56K before closing above $60K.
Hougan praised these investors as having ‘diamond’ hands for holding firm despite the challenging market conditions.
Major Financial Institutions Among Top Bitcoin ETF Holders
Recent 13F filings revealed that Goldman Sachs and Morgan Stanley ranked among the top five holders of BlackRock’s iShares Bitcoin Trust (IBIT). As of June 30th, Goldman Sachs held $238.6 million in IBIT, while Morgan Stanley held $187 million.
It’s noteworthy that Morgan Stanley and Goldman Sachs, as part of the major wirehouses, are expected to lead the second wave of BTC ETF adoption from Q3 onwards. Morgan Stanley has already started recommending BTC ETFs to select clients, potentially driving further adoption.
This trend is likely to boost institutional investors’ contribution to the BTC ETF’s assets under management (AUM). In Q1, institutions accounted for $3 to $5 billion (7%-10%) of the BTC ETF’s total AUM, which was $50 billion at that time. As of now, the total BTC ETF’s AUM has grown to $53.6 billion.
Continued Momentum in Q3
Interestingly, institutional accumulation of BTC ETFs has continued to gain momentum in Q3 as well. Glassnode data indicates that major ETF wallets have increased their accumulation, a trend reminiscent of March when Bitcoin reached an all-time high of $73K.
“Recently, this trend (supply distribution) has shown signs of reversing, especially among the largest wallets, often linked to ETFs, which are now returning to accumulation.”
