The institutional adoption of spot Bitcoin exchange-traded funds (ETFs) saw a significant uptick during the second quarter of 2024 despite Bitcoin’s recent correction.
Institutional adoption of the United States-based spot Bitcoin (BTC) ETFs grew by over 27% during the second quarter of 2024.
Over 262 new firms have invested in spot Bitcoin ETFs, according to Vetle Lunde, a senior analyst at K33 Research, who wrote in an Aug. 16 X post:
“According to 13F filings, 1,199 professional firms held investments in U.S. spot ETFs as of June 30, marking an increase of 262 firms over the quarter.”
Bitcoin ETF, institutional holder growth. Source: Vetle Lunde
Continued institutional ETF adoption could significantly bolster Bitcoin’s price since institutions hold large amounts of capital that can move crypto markets. Bitcoin needs continued institutional adoption to reach new all-time highs.
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Retail investors still hold the majority of Bitcoin ETFs
Despite the growing institutional adoption of Bitcoin ETFs, retail investors are still the largest holder cohort, according to Lunde:
“While retail investors still hold the majority of the float, institutional investors increased their share of total AUM by 2.41 percentage points, now accounting for 21.15% in Q2.”
13F/13G ownership % of total BTC ETF AUM
Institutional investors only owned 18.7% of the total ETF assets under management (AUM) during the first quarter of 2024.
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Uptick in institutional Bitcoin ETF exposure unable to lift Bitcoin above $60,000
The Bitcoin price has been struggling to gain momentum past the $60,000 psychological mark despite the growing institutional portfolio allocation to US Bitcoin ETFs.
Bitcoin fell under $60,000 on Aug. 14. The world’s first cryptocurrency is down 3.3% on the weekly chart, trading at $58,370 as of 10:49 am UTC.
BTC/USD, 1-week chart. Source: Cointelegraph
Contributing to the price slump, Bitcoin ETF inflows continue to stagnate. ETF inflows turned positive on Aug. 15, with over $11 million worth of inflows, according to Farside Investors data.
Spot Bitcoin ETF flows (US dollars, million). Source: Farside Investors
However, this is far less than the $81.4 million worth of cumulative outflows recorded on Aug. 14.
ETF inflows can significantly contribute to a cryptocurrency’s price appreciation. For Bitcoin, ETFs accounted for about 75% of new investment in the cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.
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