In the realm of Bitcoin exchange-traded funds (ETFs), it’s not just retail traders jumping on board. Recent data from H.C. Wainwright underscores a significant influx of capital from institutional heavyweights like hedge funds, pension funds, and banks into these funds, marking a notable milestone after over a decade of anticipation.
According to H.C. Wainwright’s analysis, as of March 31, Morgan Stanley held a substantial $270 million stake in the Grayscale Bitcoin Trust (BTC) (NYSE:GBTC), as disclosed in a 13F filing. The trend extends beyond Morgan Stanley, with other financial giants such as JPMorgan, Wells Fargo, and UBS also revealing positions in spot bitcoin exchange-traded funds during the first quarter.
Estimations from the investment bank suggest that 13-F filings were instrumental in driving approximately $1 billion in net inflows into spot BTC ETFs over the past week alone, effectively reversing nearly $500 million of net outflows observed in the preceding eight weeks. Year-to-date, net flows into these funds have surpassed a staggering $12 billion.
Further insights from H.C. Wainwright’s memo highlight that 563 professional investment firms collectively reported ownership of BTC ETFs valued at $3.5 billion, based on filings released through May 9. Notably, investment advisors comprised 60% of these holders, with hedge funds constituting 25%.
Data from Bitcoin brokerage firm River Financial reveals that during the January-March quarter, 13 out of the top 25 U.S. hedge funds, including Citadel, Millennium, and Point72, initiated positions in BTC ETFs. Additionally, the State of Wisconsin Investment Board made history by becoming the inaugural U.S. state pension fund to enter the spot BTC ETF arena, acquiring $163 million worth of IBIT and GBTC in Q1.
In the latest market update from H.C. Wainwright, Bitcoin experienced a notable 7.9% surge for the week ending May 19, reaching just above the $66,200 mark. This outperformance was evident against broader equity indexes, with the S&P 500 and Nasdaq rising by 1.5% and 2.1%, respectively. Concurrently, Bitcoin mining stocks climbed 3.1% following slightly better-than-expected April CPI data and increasing institutional adoption.
On the blockchain front, the network hash rate exhibited a 2.6% weekly increase to 592 EH/s after two consecutive weeks of decline, while network difficulty remained stable at 83.1T following a 5.6% adjustment on May 9.
In regulatory developments, Oklahoma passed a groundbreaking bill aimed at safeguarding Bitcoin rights within the state, effective November 1, 2024. The legislation ensures fundamental rights for individuals and corporations engaged in digital asset activities, including the right to self-custody and utilize BTC for transactions without additional taxes or penalties. Moreover, specific protections are extended to Bitcoin miners, shielding them from local government obstacles and eliminating the necessity for a money transmitter license. This legislative stride aligns with similar positive actions witnessed in other Bitcoin-friendly states like Montana, Arkansas, and Wyoming.
