In a new memo, Matt Hougan, Bitwise Chief Investment Officer Matt Hougan offered a detailed analysis of the early adopters of Bitcoin Exchange-Traded Funds (ETFs) based on 13F filings with the SEC. His insights underscore a significant embrace of Bitcoin ETFs by professional investment firms, heralding a potential shift in the landscape of BTC investments.
Since their launch on January 11, Bitcoin ETFs have captured an impressive $11.7 billion in assets, making them the most successful ETF launch in the annals of financial products. This explosive start has sparked widespread interest in the identities of the investors—whether they are predominantly retail or professional.
Who Is Buying The Spot Bitcoin ETFs?
Hougan’s memo provides a clear answer. “A lot of professional investors own bitcoin ETFs,” he stated. These aren’t just any investors; they are some of the most respected and substantial asset managers in the industry. For instance, Hightower Advisors, ranked as the #2 RIA firm in the US by Barron’s and managing $122 billion in assets, now holds $68 million in Bitcoin ETFs. Similarly, Bracebridge Capital, a prominent Boston-based hedge fund that manages endowment funds for institutions like Yale and Princeton, has invested a hefty $434 million.
Other significant stakeholders include Cambridge Investment Research with $40 million, Sequoia Financial Advisors at $12 million, Integrated Advisors holding $11 million, and Brown Advisory with $4 million in Bitcoin ETF holdings. Altogether, as of the latest data from last Thursday, 563 professional investment firms have reported owning a combined $3.5 billion worth of Bitcoin ETFs. Hougan anticipates that by the May 15 filing deadline, these numbers could grow to over 700 firms with total assets under management nearing $5 billion.
“This is absolutely massive,” Hougan explained. “For any financial advisor, family office, or institution wondering if they were the only ones considering Bitcoin exposure, the answer is clear: You are not alone.”
From a historical perspective, the scale of professional investor ownership has been described as unprecedented. Eric Balchunas, a senior Bloomberg ETF analyst, referred to the number of large-scale investors involved in the Bitcoin ETFs as “bonkers.” By comparison, when gold ETFs launched in late 2004—a launch previously regarded as the most successful of all time—they attracted more than $1 billion in just five days. However, their first 13F filings showed only 95 professional firms investing. In contrast, Bitcoin ETFs have dramatically exceeded this mark right from their initial filings.
Despite this surge in professional interest, Hougan’s memo cautions that the total $50 billion assets under management in Bitcoin ETFs still have a substantial portion owned by retail investors. He estimates that professional investors currently account for only 7-10% of all assets. However, he suggested that media portrayal of these ETFs as “retail-driven” funds might overlook a critical emerging trend.
“Most investors follow a familiar pattern,” Hougan stated, describing a typical four-step investment trajectory observed among institutions. Initially, there is a period of due diligence lasting 6-12 months. Following this, professionals might make a small personal allocation to test the waters before recommending broader allocations to their clients. Eventually, this leads to more substantial, platform-wide allocations across their entire book of clients, typically ranging from 1-5% of the portfolio.
Given these insights, Hougan remains “incredibly” bullish about the future of Bitcoin ETFs. He concluded, “The allocations we see in recent 13F filings are just a down payment.” He highlighted that firms like Hightower Advisors, with a current 0.05% allocation, could potentially increase their investments substantially. “Multiply that by the growing number of professional investors participating in the space, and you can begin to see what’s behind my enthusiasm.”
Remarkably, yesterday, after Hougan released the memo, there was probably the most important 13F disclosure for Bitcoin to date. The State of Wisconsin Investment Board reported buying $99,167,688 (2,450,400 shares) of BlackRock’s IBIT and $63,687,310 (1,013,000 shares) of Grayscale’s GBTC.
At press time, the BTC price stood at $61,940.
