tl;dr
Institutional investors reduced their Bitcoin ETF exposure by 23% in Q1 2024, dropping from $27.4 billion to $21.2 billion, mainly due to hedge funds cutting holdings by nearly 33% as futures premiums compressed and profit hedging declined. Despite this pullback, institutions still hold about 23% of...
Institutional investors reduced their Bitcoin ETF exposure by 23% in Q1 2024, decreasing from $27.4 billion to $21.2 billion. This pullback was primarily driven by hedge funds, which cut holdings by nearly 33% amid diminished basis trade appeal and futures premium compression. Despite this reduction, institutions still control approximately 23% of Bitcoin ETF assets, signaling tactical profit-taking rather than market capitulation.
Advisors increased Bitcoin-denominated positions even though the dollar value declined, accounting for 50% of filer assets and 81% of managers disclosing Bitcoin ETFs. Professional investors maintain average portfolio allocations below 1%, indicating small, strategic adjustments. BlackRock’s iShares Bitcoin Trust dominates institutional ownership with $12.7 billion, followed by Fidelity’s FBTC and Grayscale’s GBTC, together holding 85% of Bitcoin ETF assets.
Notable inflows were recorded from Goldman Sachs and Macquarie into BlackRock’s ETF, while major hedge funds like Millennium Management and sovereign wealth funds, including Wisconsin’s state pension fund, reduced or exited positions. In sharp contrast, corporate treasuries increased Bitcoin holdings by 18.7% year-to-date, reflecting a corporate strategy that mirrors balance sheet diversification trends.
CoinShares anticipates that institutional investors will re-enter the Bitcoin ETF market once there is greater regulatory clarity, official approval of crypto mandates, and a closing of educational gaps within investment committees. The current environment shows a divergence between tactical institutional profit-taking and long-term corporate accumulation amid Bitcoin’s milestone crossing of $100,000 in February 2024.