Bitcoin ETF

Bitcoin

<h2 id="key-points">Key Points</h2>
<ul>
 <li>Bitwise CIO Matt Hougan believes Bitcoin ETF allocations in recent 13F filings are just the beginning.</li>
 <li>Professional investors typically take six to 12 months to evaluate crypto investments.</li>
</ul>
<p>Matt Hougan, the Chief Investment Officer (CIO) at Bitwise, a spot <a href="https://crypto.ro/en/cryptocurrencies/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a> ETF issuer, recently shared his views on the Bitcoin allocations of institutional investors from the first-quarter 13F filings. He believes that these allocations are just the beginning or a “down payment”.</p>
<h2 id="the-evaluation-process-of-crypto-investments">The Evaluation Process of Crypto Investments</h2>
<p>Hougan explains that professional investors usually spend six to twelve months evaluating crypto investments. This process involves due diligence, personal allocation, isolated client allocations, and finally, platform-wide allocation phases.</p>
<p>Approximately six months after the initial allocation, many firms start allocating across their entire book of clients. These allocations typically represent 1-5% of the portfolio.</p>
<h2 id="the-promise-of-bitcoin-etfs">The Promise of Bitcoin ETFs</h2>
<p>Bitcoin ETFs carry the potential to open doors for professional investors to invest in Bitcoin on a large scale. This could significantly increase the capital pool investing in the asset.</p>
<p>13F filings are quarterly reports submitted to the SEC by institutional investment managers managing at least $100 million in equity assets. These filings offer a snapshot of the manager’s stock holdings at the end of each quarter.</p>
<p>However, 13F reports only mandate the disclosure of long positions in U.S. equities and options on equities. They do not require the disclosure of short positions, therefore, only providing a partial view of an investment manager’s overall portfolio strategy.</p>
<p>Earlier this week, Bracebridge Capital was revealed as a top holder of Ark Invest’s ARKB and BlackRock’s IBIT spot Bitcoin ETFs. It also holds a significant allocation of Grayscales GBTC. Its combined spot Bitcoin ETF holdings were valued at $434 million as of March 31.</p>
<p>The State of Wisconsin Investment Board also disclosed a $163 million stake in BlackRock and Grayscale’s spot Bitcoin ETFs.</p>
<h2 id="the-growth-of-bitcoin-etfs">The Growth of Bitcoin ETFs</h2>
<p>Hougan highlighted that 563 professional investment firms reported owning $3.5 billion worth of Bitcoin ETFs as of last Thursday. By the May 15 filing deadline, he expects this number to rise to over 700 professional firms and total AUM nearing $5 billion.</p>
<p>Retail still dominates the holdings, with professional investors accounting for just 7-10% of the ETFs’ $50 billion assets under management so far. However, Hougan believes this percentage is likely to increase considerably given the pattern of institutional investor adoption.</p>
<p>As an example, Hightower Advisors’ current spot Bitcoin ETF allocation amounts to just 0.05% of its assets. If they were to follow the typical pattern of behavior Hougan outlined, a 1% allocation in time would equate to $1.2 billion from a single firm. This potential growth leaves Hougan “incredibly bullish” from the initial 13F filings.</p>

Bitwise CIO Asserts Bitcoin ETF Allocations in 13F Filings Only the Beginning

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