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Institutional Investment in Bitcoin ETFs Increases Despite Price Drop
Explore how institutional investment in Bitcoin ETFs is on the rise even amid price declines. Discover the factors driving this trend and what it means for the future of cryptocurrencies and institutional finance.
Institutional Interest in Bitcoin ETFs Grows Despite Price Decline
In the second quarter of the year, Bitcoin’s (BTC) price experienced a notable decline of 12%. However, this setback has not deterred institutional investors from significantly increasing their allocations to Bitcoin exchange-traded funds (ETFs), as highlighted in a recent report by asset manager Bitwise.
According to Bitwise’s Chief Investment Officer, Matt Hougan, the prevailing question in the cryptocurrency landscape is whether institutional and professional investors will commit to crypto assets on a larger scale. The report revealed that the total number of institutional investors participating in Bitcoin ETFs rose by an impressive 14% from the previous quarter, climbing from 965 to 1,100 investors.
Moreover, the share of total assets under management (AUM) of Bitcoin ETFs held by these institutional investors increased to 21.15%, up from 18.74%. By the end of the quarter, institutions collectively held approximately $11 billion in Bitcoin ETFs. Hougan emphasized the significance of this trend, stating, “This is a great sign; if institutions are willing to buy Bitcoin during periods of volatility, just imagine the potential impact during a bullish market.”
Despite some skepticism regarding the predominance of retail investors in Bitcoin ETFs, Bitwise has countered this narrative, asserting that institutional adoption is occurring at an unprecedented pace—arguably the fastest of any ETF in history. While most ETFs typically experience gradual growth, the report anticipates that inflows into Bitcoin ETFs will be substantially higher in 2025 compared to 2024, with projections indicating even greater inflows in 2026.
The report concluded with a strong assertion: “The institutions are coming, and they’re coming in size.” Notably, financial powerhouse Goldman Sachs disclosed in a recent 13F filing that it holds positions in seven out of eleven Bitcoin ETFs currently available in the United States.