A recent report from Bloomberg shows that new hedge funds, pension funds and banks are taking ownership of the successful Bitcoin ETF spot market, which launched in the United States earlier this year, and are continuing to pour capital into it.

701 New Funds Enter Bitcoin ETF Arena

The latest data from Bloomberg shows that following the recent deadline for filing second-quarter 13F reports with the U.S. Securities and Exchange Commission (SEC), 701 new funds disclosed their investments in spot Bitcoin ETFs, bringing the total number of holders to nearly 1,950.

Buyers in this bullish trend include hedge funds like Millennium Management, which have stakes in at least five Bitcoin ETFs. Major players like Capula Investment Management and Steven Cohen’s Point72 Asset Management have also reported interest in these ETFs.

The buyers list also includes diverse entities, from the State of Wisconsin Investment Board to market makers in global financial centers such as Hong Kong, the Cayman Islands, Canada and Switzerland.

Despite Bitcoin’s nearly 13% drop in price in the quarter, these spot Bitcoin ETFs have beaten expectations, amassing $17 billion in net inflows this year. BlackRock’s IBIT has emerged as an outlier, with assets growing to $20 billion.

Institutional winds of change

Noelle Acheson, author of the newsletter Crypto Is Macro Now, emphasizes that the growing number of Bitcoin ETF holders is a sign of investor conviction and careful research.

While the approval of spot Ethereum ETFs in July also led to significant inflows, it is notable that not all financial advisors can recommend these ETFs to their clients.

“This reflects a mix of conviction and investors taking the time to ‘do the work,’” Acheson said. “So far, Morgan Stanley is the only one of the major wirehouses whose financial advisors can recommend BTC spot ETF diversification positions. But others will follow, bringing with it more demand and a longer-term view.”

The growing institutional adoption extends beyond Bitcoin, as spot Ethereum ETFs have also gained popularity. The group of ETH-based ETFs has seen inflows of $1.9 billion, excluding the $2.3 billion in outflows from the Grayscale Ethereum Trust (ETHE), which converted into an ETF last month.

Adam Guren, founder and Chief Investment Officer of hedge fund Hunting Hill Global Capital, which reported investments in the IBIT ETF, highlighted the firm’s involvement in the cryptocurrency market since 2016.

Guren noted that one of their trading strategies is to “provide liquidity within the ETF ecosystem.” They expect to introduce more crypto-related products in the US, including options on Bitcoin and Solana ETFs, which would create further opportunities for their trading strategies.

At the time of writing, the largest cryptocurrency on the market has dropped by over 3% in the past few hours, resulting in a trading price of $56,700.

Main image of DALL-E, chart from TradingView.com