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Bitwise CIO Expresses Strong Optimism Regarding Bitcoin ETFs Following Recent SEC Announcements – Here’s the Reason
A recent surge in investor disclosures has led Bitwise, one of the foremost Bitcoin ETF providers in the United States, to feel “incredibly bullish” about BTC.
The Leading Institutional Bitcoin ETF Holders
In a recent memorandum, Bitwise CIO Matt Hougan examined some of the newly identified Bitcoin ETF purchasers, who have disclosed their holdings as part of obligatory 13F filings with regulators in recent weeks.
I consider the 13F filings for bitcoin ETFs to be exceptionally bullish for the long-term prospects of bitcoin. I elaborated on this in my latest CIO Memo: https://t.co/8WrNV5SXtj pic.twitter.com/GJC8PEXZkQ
— Matt Hougan (@Matt_Hougan) May 14, 2024
A 13F filing is a document mandated by the Securities and Exchange Commission (SEC) for all investors managing $100 million in assets, requiring them to disclose their complete ownership of publicly traded securities. Thousands of investors have now submitted their Q1 2024 reports – the initial reporting period during which Bitcoin spot ETFs have been operational.
“Many professional investors possess bitcoin ETFs,” Hougan noted, highlighting prominent asset managers such as Hightower Advisors, which holds $68 million in the new funds. Another example is Bracebridge Capital, a Boston-based hedge fund with a significantly larger $434 million investment in Bitcoin.
According to all filings submitted by May 9, a total of 563 professional investment firms were recognized as having acquired the ETFs, with total allocations amounting to $3.5 billion. This figure does not account for those filing between then and May 15, including the State of Wisconsin Investment Board (SWIB), which disclosed a $162 million allocation to Bitcoin on Tuesday.
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Reasons Behind Bitwise’s Optimism for Bitcoin ETFs
As per Hougan, it is quite rare for ETFs to draw such a high number of 13F filers within their initial months of operation. “From a breadth of ownership perspective, the bitcoin ETFs are a historic success,” he stated.
However, this does not imply that Bitcoin ETF purchasers have already diminished. The data suggests that the majority of buyers so far have been retail investors, with professional investors just beginning to engage.
“Most professional investors require 6-12 months to assess crypto,” Hougan remarked, indicating that allocations to crypto following a single client meeting are “extremely rare.”
Initially, these investors typically make personal allocations to test the waters before proceeding to make isolated allocations on behalf of their more pro-crypto clients later.
Eventually, after approximately 6 months, those firms will start implementing “platform-wide allocations” across their entire client base, which may represent 1% to 5% of their overall portfolio. For context, current allocations made by investors like HighTower account for just 0.05% of their portfolios.
“A 1% allocation of their portfolio to bitcoin would amount to $1.2 billion—all from a single firm,” Hougan noted. “Multiply that by the increasing number of professional investors entering the space, and you can start to understand the basis of my enthusiasm.”
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