Over 50% of the Largest US Hedge Funds Invest in Spot Bitcoin ETFs

Over 50% of the Largest US Hedge Funds Invest in Spot Bitcoin ETFs
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In a recent report, analysts from River have shed light on the growing trend of investments in cryptocurrency ETFs based on Bitcoin. According to their findings, a significant number of US-based hedge funds are allocating portions of their substantial assets to this emerging sector.

A total of 534 organizations and companies, each managing assets exceeding $1 billion, have ventured into the cryptocurrency ETF segment. Among the top 25 largest US hedge funds, more than half have invested in crypto funds.

The River analysts' report highlights that over 50% of the leading hedge funds in the United States have allocated funds to this new asset class. Out of the 25 prominent investment organizations, 13 have disclosed their portfolios, revealing positions in spot Bitcoin ETFs. Notably, Millennium Management emerges as the largest holder, owning 27,263 BTC, valued at $1.65 billion. This holding represents 2.5% of the company's total assets under management, which amount to $67.7 billion.

Other significant market players making notable investments include Schonfeld Strategic Advisors, with 6,734 BTC; Point72 Asset Management, with 1,089 BTC; and Sculptor Capital Management, with 833 BTC.

“At River, we believe that everyone will have savings in the first cryptocurrency, and every business will have Bitcoin on their balance sheet. We are witnessing this in real-time,” stated the company.

Experts from River pointed out that in 2023, the average US business held 2.5 BTC on its balance sheet, worth approximately $70,000 at the time. This figure has since increased to 4 BTC, with their value rising to $280,000. The company is confident that this trend indicates businesses and organizations of various sectors are accumulating Bitcoin.

Analysts also emphasized the inclination of most investors to retain Bitcoin on their balance sheets for an extended period. They believe institutional players are making significant reserves of the asset and are unlikely to sell them in the near future.

“If you sell your Bitcoins to BlackRock, you are likely not getting them back,” stated River CEO Alex Leishman.

In May 2024, over 600 companies disclosed their investments in Bitcoin-based cryptocurrency ETFs. This information became public following the submission of 13F forms to the US Securities and Exchange Commission.

Collectively, firms have invested more than $3.5 billion in crypto funds. River analysts assert that the number of companies involved in this new asset class has surpassed 1,000 over the past 18 months.

Among the major investors in this asset class, which launched in January 2024, is the financial group Morgan Stanley. According to the report, the company invested $270 million in a cryptocurrency ETF from Grayscale, making it one of the largest holders of GBTC shares.

Experts also note that several major market players remain cautious regarding Bitcoin-based crypto funds. Companies such as Reddit, Semler Scientific, and Wells Fargo have made only minor investments in this segment.

As an example of this cautious strategy, River analysts point to the financial giant JPMorgan Chase. The company has invested capital in five spot Bitcoin ETFs, but the total investments of one of the world’s largest banks in this class of products amount to only $760,000.

It is worth noting that the daily net inflow into spot Bitcoin ETFs exceeded $129 million.

The growing interest in Bitcoin-based ETFs among institutional investors indicates a significant shift in the financial landscape. As these investments continue to rise, they reflect the broader acceptance and integration of cryptocurrencies into traditional financial systems.

This trend underscores the importance of understanding and navigating the evolving cryptocurrency market. With substantial investments from major hedge funds and financial institutions, Bitcoin-based ETFs are poised to play a crucial role in the future of finance.

As more companies and organizations recognize the value and potential of cryptocurrencies, the investment landscape will continue to evolve, offering new opportunities and challenges for investors. The insights provided by River's analysts offer a glimpse into the current state of cryptocurrency investments and the growing role of Bitcoin-based ETFs in the financial world.