Bitcoin ETF Boom Continues: Institutional Investors Increase Holdings in Q2, Morgan Stanley Joins the Fray

Bitcoin ETF Boom Continues: Institutional Investors Increase Holdings in Q2, Morgan Stanley Joins the FrayAs traditional investors continue to embrace Bitcoin as an asset class, hedge funds, pension funds, and banks ramped up their investments in Bitcoin spot ETFs during the second quarter of this year. This trend is evident in the 13F filings submitted to the U

Bitcoin ETF Boom Continues: Institutional Investors Increase Holdings in Q2, Morgan Stanley Joins the Fray

As traditional investors continue to embrace Bitcoin as an asset class, hedge funds, pension funds, and banks ramped up their investments in Bitcoin spot ETFs during the second quarter of this year. This trend is evident in the 13F filings submitted to the U.S. Securities and Exchange Commission (SEC) by institutional investors, which disclose their holdings for the quarter.

Several prominent hedge funds emerged as buyers of Bitcoin spot ETFs, including Millennium Management, Capula Investment Management, Schonfeld Strategic Advisors, and Point72 Asset Management, run by hedge fund mogul Steven Cohen. Additionally, the Wisconsin Investment Board (which manages the state's retirement system and investment funds) and market makers across Hong Kong, the Cayman Islands, Canada, and Switzerland joined the investing ranks.

Among them, Millennium Management, with $68 billion in assets under management, holds at least five Bitcoin spot ETFs, including iShares Bitcoin Trust (IBIT) issued by BlackRock. While Millennium reduced its holdings in some Bitcoin ETFs like IBIT in the second quarter, its overall position remains significant, making it the largest holder of most Bitcoin ETFs. Capula Investment Management held approximately $464 million in Bitcoin spot ETFs in the second quarter, including roughly $253 million in IBIT and $211 million in Fidelity Wise Origin Bitcoin ETF (FBTC).

According to media reports, as of August 14, 701 funds had added holdings in Bitcoin spot ETFs, bringing the total number of funds holding such ETFs to nearly 1,950. Notably, these funds took positions even as Bitcoin prices declined by nearly 13% in the second quarter.

Noelle Acheson, author of the crypto market and macroeconomic analysis newsletter Crypto Is Macro Now, called this surge in institutional investor interest in Bitcoin ETFs encouraging given Bitcoin's poor performance in the second quarter and the current limited number of cases where financial advisors are allowed to recommend Bitcoin ETFs to clients.

In January, 11 Bitcoin spot ETFs were approved for listing in the U.S., marking a significant step towards lowering the barrier to entry for Bitcoin investment and providing investors with a more convenient and cost-effective investment avenue. Despite volatility in the Bitcoin market, exchange collapses, and criticisms from financial heavyweights, Bitcoin's resilience has been tested and proven.

To meet client demand, Morgan Stanley made Wall Street history this month by becoming the first major bank to allow its financial advisors to promote Bitcoin ETFs. Starting July 7, approximately 15,000 Morgan Stanley financial advisors were able to recommend IBIT and FBTC to their clients.

Media estimates suggest that Bitcoin spot ETFs have attracted a cumulative $17 billion in net inflows since their launch in January, with IBIT's assets under management expanding to $20 billion. Both in terms of fund flows and asset management, these Bitcoin ETFs have exceeded expectations.