U.S. Institutional Investors All Are Buying In Spot Bitcoin ETFs

Several major U.S. financial institutions have been adding spot Bitcoin Exchanged Traded Funds (ETFs) to their portfolios.

During the first quarter of the year, hedge funds, wealth management funds, and some of the largest banks in the country, including JPMorgan and the Wisconsin pension fund, bought shares in one of the eleven ETFs currently trading on the U.S. stock market.

Bitcoin ETFs began trading on the stock exchange on January 11, following the Securities and Exchange Commission's approval.

In the last couple of weeks, the scope of large financial investors' interest in BTC ETFs has come to light as institutions managing over $100 million in assets file their mandatory quarterly equity holdings, the 13F filings, with the SEC.

Most surprisingly, the investment board of the state of Wisconsin disclosed that it had bought shares worth almost $100 million of Blackrock's iShares Bitcoin Trust (IBIT) spot Bitcoin ETFs and $64 million in shares of Grayscale's Bitcoin Trust (GBTC).

The institution manages the holdings of several federal and state funds, including the retirement system fund. Pension funds tend to have low-risk investment strategies and would usually wait about a year, when the exchange-traded funds gather enough liquidity, before adding them to their 13F filings.

"As we've seen, these are no ordinary launches," commented Bloomberg senior analyst Eric Balchunas regarding Bitcoin ETFs in a post on X. Despite only recently hitting the market, these funds already have the liquidity that similar products take much longer to acquire.

Another unexpected exposure to Bitcoin's price, which was also revealed in a 13F filing, comes from JPMorgan Chase, one of the U.S.'s largest banks. Although the firm's Chairman and CEO, Jamie Dimon, is an outspoken critic of digital assets, it didn't stop the bank from adding $1 million worth of shares in IBIT, Bitwise, and Fidelity-managed Bitcoin ETFs to its portfolio.

On the same day, JPMorgan filed its report on the equity holdings maintained until March 31, Wells Fargo, the country's third largest bank, also filed its report. Like its main competitor, the bank has bought shares in Grayscale's GBTC.

Institutions tend to move in hordes, and this time is no exception. Several hedge funds, such as Millennium Management, Apollo Management, Elliott Capital, and Bracebridge Capital, jumped in on Bitcoin ETFs. With around $2 billion worth of shares, Millennium is (so far) the greatest institutional holder.

Wealth management companies, including Legacy Wealth Asset Management, United Capital Management of Kansas Inc., and Hightower Advisors, one of the largest investment advisor firms in the U.S., have also revealed exposure to Bitcoin-based products.

Balchunas says it is "impressive just how many different institution types represented in the first 13Fs." Apart from endowment institutions, all others have already added financial assets to their portfolios. "Normally, you don't see this long a list of holder types until years after launch and mega liquidity," the senior analyst noted.