Despite the volatility of the leading cryptocurrency, institutional players remain resilient. This was stated by Andre Dragos, head of Bitwise’s research department in Europe, in a conversation with The Block.
“[Large investors] are not fleeing from the increased volatility of Bitcoin; instead, they remain quite stable and inclined to hold,” he noted.
Dragos highlighted data from asset managers’ reports for the second quarter of 2024, which, in his view, showed a “promising commitment” of institutional market participants to Bitcoin ETFs compared to products based on other asset classes like gold.
The Bitwise analyst noted that most investors who purchased exchange-traded funds based on the leading cryptocurrency at the beginning of the year held onto their assets or increased their positions in the spring.
“Of the companies registered in the first quarter, 44% increased their asset holdings, 22% maintained them, 21% reduced them, and 13% withdrew their share in Bitcoin ETFs in the second quarter. When compared to other funds, this result is indeed good,” Dragos shared the statistics.
Illustrating the growing institutional involvement, the expert emphasized that more than 60% of the world’s leading hedge funds own digital gold through ETFs. Such organizations constitute the main share of trading volumes in spot exchange-traded funds based on the leading cryptocurrency, he explained.
“Large hedge funds like Millennium, Schonfeld, Boothbay, Capula, and others are among the leading holders of most Bitcoin ETFs. However, there are also many family offices, institutional investors, and consultants among them,” Dragos clarified.
Previously, investment bank Goldman Sachs and trading firm DRW Holdings reported in filings to the SEC about adding cryptocurrency-related ETFs to their portfolios.
Back in May, Robert Mitchnick, head of digital assets at BlackRock, stated expectations of a new wave of inflows into spot Bitcoin funds due to institutional participation.
In April, a similar forecast was presented by analysts at Bernstein.