Bitcoin ETF Institutional Adoption Soars 25%

The institutional adoption of spot Bitcoin exchange-traded funds (ETFs) experienced a notable increase during the second quarter of 2024, even as Bitcoin faced a recent correction.

Institutional involvement in U.S.-based spot Bitcoin ETFs expanded by more than 27% during Q2 2024.

According to Vetle Lunde, a senior analyst at K33 Research, 262 new firms invested in spot Bitcoin ETFs. He wrote in an Aug. 16 X post:

“According to 13F filings, 1,199 professional firms held investments in U.S. spot ETFs as of June 30, marking an increase of 262 firms over the quarter.”

The continued adoption of ETFs by institutions could have a significant impact on Bitcoin’s price, as these entities manage substantial amounts of capital capable of influencing crypto markets.

Despite the rising institutional interest in Bitcoin ETFs, retail investors remain the largest group of holders. Lunde noted:

“While retail investors still hold the majority of the float, institutional investors increased their share of total AUM by 2.41 percentage points, now accounting for 21.15% in Q2.”

In the first quarter of 2024, institutional investors held only 18.7% of the total ETF assets under management (AUM).

Bitcoin's price has struggled to break through the $60,000 psychological barrier, despite the growing institutional allocation to U.S. Bitcoin ETFs.

Bitcoin dropped below $60,000 on Aug. 14, with the cryptocurrency down 3.3% on the weekly chart and trading at $58,370 as of 10:49 am UTC.

Contributing to the price decline, Bitcoin ETF inflows have remained stagnant.

On Aug. 15, ETF inflows turned positive with over $11 million worth of inflows, according to Farside Investors data.

However, this amount is significantly lower than the $81.4 million in cumulative outflows recorded on Aug. 14.

ETF inflows can play a crucial role in driving up a cryptocurrency’s price. For instance, Bitcoin ETFs were responsible for about 75% of new investment in the cryptocurrency by Feb. 15, as it crossed the $50,000 mark.

Sources:

https://cointelegraph.com/news/institutional-bitcoin-etf-adoption-rises-q2

https://x.com/VetleLunde/status/1824381970425540749

https://farside.co.uk/btc/