Institutional spot Bitcoin investment funds saw significant growth in Q2 2024 despite Bitcoin’s recent correction. The adoption of US-based spot Bitcoin ETF funds by institutions grew by more than 27% in Q2 2024. According to Vetle Lunde, a senior analyst at K33 Research, over 262 new firms invested in spot Bitcoin ETF funds.
What’s Happening in the ETF Sector?
Vetle Lunde mentioned in a post on X on August 16:
“According to 13F filings, as of June 30, 1,199 professional firms invested in US spot ETF funds, marking an increase of 262 firms this last quarter.”
The continued adoption of institutional ETFs could significantly increase Bitcoin’s price due to the large amount of capital institutions can move in crypto markets. For Bitcoin to reach new all-time highs, institutional adoption must continue.
According to Lunde, despite the increasing adoption of Bitcoin ETF funds by institutional investors, individual investors remain the largest holding group:
“While individual investors still hold the majority of outstanding shares, institutional investors increased their share of total AUM by 2.41 points to reach 21.15% in Q2.”
Details on the Matter
Institutional investors held only 18.7% of the total ETF assets under management (AUM) in Q1 2024. Despite increased institutional portfolio allocation to US Bitcoin ETF funds, Bitcoin’s price struggles to surpass the $60,000 psychological level. Bitcoin fell below $60,000 on August 14. The world’s first cryptocurrency was trading at $58,370, down 3.3% on the weekly chart at the time of writing.
Bitcoin ETF inflows, which contribute to price declines, remain stagnant. According to Farside Investors data, ETF inflows turned positive on August 15 with over $11 million in inflows. However, this is much less than the cumulative outflows of $81.4 million recorded on August 14.
ETF inflows can significantly contribute to the price increase of a cryptocurrency. For Bitcoin, when ETFs surpassed the $50,000 mark on February 15, new investments in the cryptocurrency accounted for about 75% of the total.
