Who's Buying Bitcoin?A Panorama of ETFs and Institutional Investors in 2024

While the majority of bitcoin ETF investments in Q1 2024 and in Q2 continue to come from retail investors or non-filers, professional investor participation may be increasing due to the fact that professional investors make a small number of personal allocations before making allocations on behalf of their clients, and they want to test the waters before going public with investors.

　　Nearly 1,015 institutions held approximately $11.72 billion in bitcoin spot ETFs in Q1 2024 . While this represents about 23.2% of the total U.S. BTC ETF (including GBTC) market, there are an additional 76.8% of holders who are unidentified (non-filers, e.g., with less than $100 million in assets, or retail investors). A large portion of institutions hold only a small fraction of their total BTC ETF assets under management.

　　Despite the 12% drop in the price of Bitcoin in Q2 2024, institutional investors continued to buy Bitcoin ETFs, with a total of 1,100 institutions holding $11 billion (although the value of the positions declined compared to Q1's $11.73 billion, the holdings actually increased, as BTC declined by more than 12% in Q2). The number of institutions increased by 8.37% compared to Q1 (1,015). 2024 Q2 saw a total of 6,794 13F institutions with positions totaling more than $48.66 trillion in market value, so nearly 1/6th of all 13F institutions hold spot Bitcoin ETFs.

　　As of October 8, 2024, governments held approximately 529,365 Bitcoins valued at $32.968 billion, or 2.52% of the total. 42 publicly traded companies held 363,827 Bitcoins valued at $22.659 billion, or 1.73% of the total supply. 12 private companies held approximately 359,638 Bitcoins valued at $22.398 billion, or 1.71% of the total. The total number of Bitcoins is 2,100,000,000,000 Bitcoins.

　　With a total of 21 million bitcoins, either as a reserve asset or as part of an innovative investment, its holders have gradually diversified since its inception, with publicly traded companies, private corporations, and some government agencies joining the ranks of bitcoin holders.20 In January 2024, the U.S. approved a bitcoin spot ETF to provide investors with an easier way to get their hands on the cryptocurrency, which has quickly made ETFs by far the largest group of holders. As of October 8, 2024, global BTC ETFs held more than 1.1 million BTC (approximately $68.726 billion), or 5.26% of the total supply; of these, the U.S. BTC ETFs held approximately 928,000 (approximately $57.793 billion), or 84.13% of the total global BTC ETFs.

　So who exactly is buying spot bitcoin ETFs? The answer can be found through SEC (U.S. Securities and Exchange Commission) 13F filings that reveal the movements of these investors.

　　The SEC's Form 13F is a quarterly report that requires institutional investors (e.g., hedge funds, asset managers, etc.) with more than $100 million in assets under management to disclose their holdings of U.S. equities, including common stocks, exchange-traded funds (ETFs), and convertible bonds, to the SEC. The filing is due within 45 days after the end of each quarter.13F The primary purpose of the 13F is to provide market transparency and enable investors and regulators to understand the positions of large institutional investors.

　According to the 13F report filed with the SEC for the first quarter of 2024, there were nearly 1,015 institutions holding approximately $11.72 billion in bitcoin spot ETFs in the first quarter . While this represents approximately 23.2% of the total U.S. BTC ETF (including GBTC) market, an additional 76.8% of holders are unidentified (non-filers, e.g., less than $100 million in assets, or retail investors).

　　With 18 holding more than $100 million in BTC-related assets, 106 holding more than $10 million, and 382 holding more than $1 million in BTC in Q1 2024, a large portion of institutions hold only a small fraction of their total custody of BTC ETF assets.

　　Note: Q1 2024 (as of March 31) saw about $14.767 billion in outflows from Grayscale GBTC and about $12.132 billion in net inflows to BTC ETFs such as BlackRock, Fidelity, and Bitwise. That's a total of $26.899 billion in inflows from several ETFs that passed in January. As of the end of the first quarter of 2024, the asset size of U.S. spot BTC ETFs (including GBTC and excluding other national ETFs) was a whopping $50.58 billion.

　　If we go by the inflows into several spot BTC ETFs that passed in 2024 (BlackRock, Fidelity, Bitwise, etc.), the share of these 1,000 institutional holdings will go up as many institutions swap GBTC for lower-fee ETFs such as IBIT, FBTC, etc.

　　There were nearly 1,015 institutional holdings of ETFs in the first quarter not including those with a value of 0. Some institutional holdings are shown as 0, indicating that they held and then sold.

　Despite the 12% drop in the price of Bitcoin in Q2 2024, institutional investors continued to buy the Bitcoin ETF, with a total of 1,100 institutions holding $11 billion according to Bitwise (although the value of the position fell compared to Q1's $11.73 billion, it was actually an increase, as BTC fell by more than 12% in Q2). The number of institutions is up 8.37% compared to Q1 (1,015).

　　Two-thirds of institutional holders continued to hold or increase their holdings in Q2, but 34% also chose to reduce or liquidate their positions. These institutions remain concentrated in the hedge fund, treasury, quantitative and banking sectors. According to data from Sina Finance, there were 6,794 13F institutions in 2024 Q2, with positions totaling more than $48.66 trillion in market capitalization, so nearly 1/6th of all 13F institutions hold spot Bitcoin ETFs.

　　Note: Q2 2024 (as of June 30) saw about $18.515 billion in outflows from Grayscale GBTC and about $14.522 billion in net inflows to BTC ETFs like BlackRock, Fidelity, and Bitwise. That's a total of $33.037 billion in inflows from several ETFs that passed in January. As of the end of the second quarter of 2024, the asset size of U.S. spot BTC ETFs (including GBTC and excluding other national ETFs) was a whopping $50.34 billion. ($50.58 billion in Q1, the size of the position also needs to be factored in with the 12% drop in the price of Bitcoin, so the overall holdings are up)

　Many different types of specialized institutions hold bitcoin ETFs, including hedge funds, investment advisors, quantitative, banks, and even state government investment funds hold BTC ETFs. hedge funds and investment advisors are the largest group of holders among the institutions disclosed, with investment advisors being the most numerous, with more than 700 holding about $3.8 billion worth of BTC ETFs in the first quarter, hedge funds There were only 107 but more concentrated holdings of about $4.7 billion. Investment advisors overtook hedge funds as the largest group of holders in the second quarter.

　　Bitcoin ETFs are attracting unprecedented professional investor interest. Eric Balchunas, a Bloomberg ETF analyst, said that investor participation of this magnitude is phenomenal for a new ETF. Historically, even the most successful ETF launches, such as the 2004 gold ETF, which raised more than $1 billion in just five days, had only 95 specialty firms invested in the product at the time of the first 13F filing. By contrast, the Bitcoin ETF has been a historic success in terms of broad investor participation.

　　Eric Balchunas also tallied the institutional positions of the 10 fastest-growing new ETFs of all time. After only two quarters on the market, the Bitcoin ETF is far ahead of other ETFs in both the number of holders and the size of assets under management (AUM).

　　The only slightly comparable ETFs are the Nasdaq-100 QQQs, although this comparison may not be appropriate because the QQQ ETF was launched in March 1999, but Eric Balchunas only found historical 13F data for the first quarter of 2001 for comparison (i.e., the data lagged by nine quarters). Even so, the Bitcoin ETF still has three times as many institutional holders as QQQ.