Bitwise CIO Is ‘Incredibly Bullish’ Based on Recent SEC Filings by U.S. Professional Investors

by

As an analyst with extensive experience in the financial industry, I find Matt Hougan’s analysis of the inflows into Bitcoin ETFs intriguing. The collective $12.15 billion assets under management (AUM) make these ETFs the most successful launch in history, and identifying the source of these inflows is crucial for understanding the market dynamics.

As a researcher, I’ve recently delved into an intriguing study led by Matt Hougan, the Chief Investment Officer of Bitwise Asset Management. In his comprehensive analysis, he sheds light on the remarkable success of the 11 Bitcoin Exchange-Traded Funds (ETFs) that received approval from the U.S. Securities and Exchange Commission (SEC) on January 10, 2024. Since their inception, these ETFs have amassed an impressive $12.15 billion in assets under management, making them the most popular ETF launch ever recorded.

Hougan underscores the importance of distinguishing between professional and retail investors contributing to the Bitcoin inflows. The participation of professional investors holds significant weight because it indicates a large and expanding capital base investing in Bitcoin. Previously, pinpointing the origin of the inflows was difficult due to the anonymous buying process of ETFs via brokerage accounts. However, the SEC-mandated quarterly “13F” filings from investors managing over $100 million in publicly traded securities have brought much-needed transparency.

As a researcher studying 13F filings up to May 9, 2024, I came across an intriguing trend: several prominent investment firms have substantial holdings in Bitcoin ETFs. Notable among them are Hightower Advisors, Bracebridge Capital, Cambridge Investment Research, Sequoia Financial Advisors, Integrated Advisors, and Brown Advisory. The collective value of these firms’ Bitcoin ETF investments amounts to $3.5 billion. I expect that by the May 15 filing deadline, more than 700 investment firms will have reported owning Bitcoin ETFs, with a potential total AUM approaching $5 billion.

Hougan expresses that the extent of professional investor interest in this new ETF’s launch is unparalleled. Eric Balchunas of Bloomberg ETF Analysis refers to the magnitude of ownership as “extraordinary,” emphasizing its notable historical implication.

If you manage money for the Ivys you are as pro as it gets. Good catch here.

— Eric Balchunas (@EricBalchunas) May 13, 2024

Based on the information from the Bitwise CIO, an estimated 90% of the $50 billion in assets under management (AUM) for Bitcoin ETFs is owned by retail investors, whereas institutional participants make up the remaining percentage.

As a researcher studying the current trends in retail and institutional investment in new asset classes like Bitcoin ETFs, I’d like to highlight that while retail investment has reached an impressive level, it should not overshadow the institutional interest. Institutional investors, such as Hightower Advisors with their $68 million allocation, typically follow a phased approach.

According to Hougan, the significant upfront investments made by established financial institutions point to an increasing adoption and assimilation of Bitcoin into conventional investment portfolios.

Read More

2024-05-16 18:12