Bitwise, a prominent Bitcoin ETF provider in the United States, is feeling extremely optimistic about BTC after reviewing recent investor disclosures. These disclosures were made as part of mandatory 13F filings with regulators, revealing the allocations of newly uncovered Bitcoin ETF buyers. A 13F filing is a form required by the SEC for investors with at least $100 million in assets under management to disclose their ownership of publicly traded securities. Many investors have filed their Q1 2024 reports, which is the first reporting period since Bitcoin spot ETFs went live.
Bitwise CIO Matt Hougan noted that numerous professional investors own Bitcoin ETFs. Noteworthy asset managers, such as Hightower Advisors, have already invested $68 million in the new funds. Additionally, Bracebridge Capital, a Boston-based hedge fund, holds a significant $434 million in Bitcoin. As of May 9, a total of 563 professional investment firms were identified as purchasers of the ETFs, with a combined allocation of $3.5 billion. This figure does not include filings after May 9, such as the State of Wisconsin Investment Board, which reported a $162 million allocation to Bitcoin on Tuesday.
Hougan explains that it is uncommon for ETFs to attract such a large number of 13F filers within the first few months of going live. He considers the breadth of ownership of Bitcoin ETFs to be a historic success. However, this does not mean that Bitcoin ETF buyers have disappeared. The data suggests that the majority of buyers so far have been retail investors, with professional investors only starting to enter the market.
Hougan points out that most professional investors take 6-12 months to evaluate cryptocurrencies. It is extremely rare for them to make allocations to crypto after just one client meeting. Typically, they make personal allocations to test the waters before making isolated allocations on behalf of more pro-crypto clients. After about 6 months, these firms may begin making “platform-wide allocations” to their entire client book, comprising 1% to 5% of their overall portfolio. Currently, allocations made by investors like HighTower account for just 0.05% of their portfolios.
Overall, Bitwise is highly optimistic about Bitcoin ETFs based on the significant interest from professional investors and the potential for further allocations in the future.
