1. Unwavering Confidence Despite Instability
2. Hedge Funds on the Front Line
3. Growing Bitcoin Adoption Despite Volatility

The year 2024 was marked by notable fluctuations in the crypto market, but this did not dampen institutional investors’ enthusiasm for Bitcoin ETFs. Despite a 14.5% drop in the asset’s value during the second quarter, major financial players demonstrated remarkable resilience.

Unwavering Confidence Despite Instability

In the midst of the financial storm that Bitcoin went through in the second quarter of 2024, many were predicting a massive exodus of institutional investors. However, the numbers tell a very different story. According to reports filed with the US Securities and Exchange Commission (SEC), about 44% of asset managers increased their holdings in Bitcoin ETFs, while 22% chose to maintain their positions. This leaves only a minority of 21% who reduced their exposure, and a meager 13% who decided to bow out. How to explain this resilience? Institutional investors, often perceived as “diamond hands,” do not panic at the first sign of volatility. Unlike retail investors, they seem to see beyond short-term fluctuations, viewing Bitcoin not just as a speculative asset, but as a long-term store of value. This long-term perspective explains why, even during downturns, they continue to strengthen their presence in the Bitcoin ETF market.

Hedge Funds on the Front Line

Among Bitcoin ETF holders, hedge funds stand out as the most aggressive players. Names like Millennium, Schonfeld, Boothbay, and Capula have become emblematic figures of this bold investment strategy. These funds, managing billions of dollars in assets, have seen Bitcoin as an opportunity to balance their portfolios with a dose of calculated risk. It is interesting to note that the enthusiasm for Bitcoin ETFs is not limited to hedge funds. Family offices, financial advisors, and even some pension funds have been drawn to the prospects offered by Bitcoin. This diversity of investors highlights the “mainstream” nature of Bitcoin ETFs, which manage to attract both individual wealth managers and the most conservative financial institutions. As noted by Bitwise’s Chief Investment Officer, Matt Hougan, it is almost ironic to see such different entities as Millennium and the State of Wisconsin sharing the same positions in Bitcoin ETFs.

Growing Bitcoin Adoption Despite Volatility

The second quarter of 2024 was also marked by a growing adoption of Bitcoin ETFs, despite a hostile market environment. Matt Hougan revealed that the number of holder/ETF pairs increased by 30%, from 1,479 in the first quarter to 1,924 in the second quarter. This figure is even more impressive when considering that the price of Bitcoin dropped during the same period. This increase is a testament to institutional investors’ confidence in Bitcoin’s long-term potential. Indeed, far from panicking in the face of falling prices, these investors saw the opportunity to strengthen their positions at a reduced cost. This strategy, often used by experienced investors, is based on the idea that Bitcoin, despite its fluctuations, will ultimately appreciate in the long term.

Despite significant fluctuations in the market, institutional investors continue to adhere to their investment strategies in Bitcoin ETFs. Their long-term approach and commitment to strengthening positions indicate deep confidence in Bitcoin’s potential.