Bitcoin & Ether ETFs: Investment Advisers Dominate Hedge Funds
Investment Advisers Increase Crypto ETF Holdings
New data from Bloomberg Intelligence reveals that investment advisers are the largest identifiable group, excluding retail investors, acquiring Bitcoin and Ether exchange-traded funds (ETFs).
Bloomberg ETF analyst James Seyffart noted that investment advisers are “dominating the known holders” of Ether ETFs, holding over $1.3 billion, representing 539,000 ETH in Q2. This marks a 68% increase from the previous quarter.
Similar trends are observed in US spot Bitcoin ETFs, where advisers hold over $17 billion across 161,000 BTC.
In both instances, investment adviser holdings nearly double those of hedge fund managers.
It's important to note, however, that this data primarily relies on SEC filings (13F data), accounting for approximately 25% of total Bitcoin ETF shares. The remaining 75% are held by non-filers, largely retail investors.
Shifting from Speculation to Long-Term Investment
Vincent Liu, CIO at Kronos Research, suggests this data signals a shift from speculative trading to long-term, portfolio-driven asset allocation.
He emphasizes that the strategic positioning of investment advisers provides deeper liquidity and a more stable foundation for integrating crypto into global markets. As more advisers adopt Bitcoin and Ether ETFs, crypto is becoming recognized as a long-term diversification tool.
Potential for Further Growth in Crypto ETF Adoption
Some analysts speculate that the involvement of financial advisers in crypto ETFs could expand significantly as regulatory frameworks mature. Predictions suggest trillions of dollars could enter the market via financial advisers.
Pav Hundal, lead market analyst at Swyftx, observes that investment adviser holdings in Bitcoin ETFs have increased by roughly 70% since June, spurred by a more favorable regulatory environment in the US and strong demand for risk-on assets.
Regulatory Clarity's Impact on Crypto ETFs
Kadan Stadelmann, CTO of Komodo Platform, believes that the data indicates a growing trend of “Main Street” accessing crypto markets through Wall Street via financial advisors.
He highlights that Ether ETFs mirror the success of Bitcoin ETFs, but on a smaller scale, signifying a transition from early adoption to institutional integration involving major firms like BlackRock and Fidelity.
Stadelmann emphasizes the role of regulation in the growth of financial advisers in the crypto space. Recent initiatives like the SEC’s Project Crypto and the passage of the Genius Act in the House provide much-needed regulatory clarity.