Fund managers boost exposure to bitcoin ETFs, quarterly US filings show

Fund managers boost exposure to bitcoin ETFs, quarterly US filings show

Institutional Investors Ramp Up Bitcoin ETF Holdings Amid Soaring Prices in Q4 2024

In the final quarter of 2024, asset managers across the financial spectrum—including wealth management firms, hedge funds, pension funds, and sovereign wealth funds—significantly increased their investments in U.S. exchange-traded funds (ETFs) linked to Bitcoin’s price. This surge in institutional interest coincided with Bitcoin’s impressive 47% rally during the quarter, as revealed by recent regulatory filings with the U.S. Securities and Exchange Commission (SEC).

Institutional Demand for Bitcoin ETFs Grows

Among the notable investors, the State of Wisconsin Investment Board more than doubled its holdings in the iShares Bitcoin Trust ETF, reaching 6 million shares by the end of 2024. This marks a substantial commitment from one of the largest state-run pension funds in the U.S., which had previously been among the first institutions to report exposure to Bitcoin ETFs following their debut in January 2024.

Additionally, Tudor Investment Corp, the hedge fund led by legendary investor Paul Tudor Jones, increased its stake in the iShares Bitcoin ETF from 4.4 million shares to 8 million shares. With Bitcoin’s price appreciating sharply during this period, the value of Tudor’s ETF holdings soared from $159.9 million at the end of Q3 to $426.9 million by year-end.

Another major entrant into the Bitcoin ETF space was Mubadala Investment Co, an Abu Dhabi-based sovereign wealth fund, which disclosed a new position of 8.2 million shares in the iShares Bitcoin Trust ETF. This holding, valued at $436.9 million, marks Mubadala’s first known exposure to Bitcoin through regulated investment vehicles, underscoring the growing acceptance of digital assets among government-backed funds.

Hedge Funds and Financial Advisors Follow Suit

Beyond pension funds and sovereign entities, hedge funds were also aggressive buyers of Bitcoin ETFs. Hunting Hill Capital, which had no Bitcoin ETF holdings in Q3, emerged as a key player by the end of the year, accumulating positions valued at $131 million. The firm’s founder and chief investment officer, Adam Guren, explained that the absence of reported holdings in Q3 was due to the timing of trading activity. "We’ve been actively trading within the broader crypto ETF complex, and the timing of the third-quarter filing may not have aligned with when we bought and sold various ETFs," Guren stated.

Meanwhile, financial advisory firms catering to individual and institutional clients also expanded their positions. Cetera Advisors and NewEdge Advisers increased their exposure across multiple Bitcoin ETFs, including those managed by Fidelity, ARK Investments, and Invesco, reflecting heightened demand from clients eager to gain indirect exposure to Bitcoin.

However, not all investors pursued a broad-based buying strategy. Cresset Asset Management, for instance, focused on ETFs with lower management fees to optimize returns for clients. "It's also possible right now to get attractive options pricing for collar strategies, allowing us to protect the downside while giving away less of the upside in exchange, on these Bitcoin funds," explained Jack Ablin, Cresset’s chief investment officer.

Bitcoin’s Continued Institutional Adoption

The wave of institutional investment in Bitcoin ETFs highlights a significant shift in how traditional finance views digital assets. With large investors increasingly allocating capital to Bitcoin through regulated financial products, the crypto market may see further price stability and adoption in 2025. As Bitcoin ETFs continue to gain traction, demand from pension funds, hedge funds, and sovereign wealth funds could serve as a key catalyst for Bitcoin’s next major price move.