Institutional Investment in Spot Bitcoin ETFs Grows as Retail Dominance Continues

Retail investors continue to lead the way in spot Bitcoin (BTC) exchange-traded funds (ETFs), but institutional interest is growing steadily each quarter, as reported by Vetle Lunde from K33 Research.

According to Lunde’s update on the social media platform X, the number of professional firms investing in spot BTC ETFs has increased by 262, bringing the total to 1,199.

Institutional ownership of BTC ETFs grew solidly in Q2!

According to 13F filings, 1,199 professional firms held investments in U.S. spot ETFs as of June 30, marking an increase of 262 firms over the quarter.

While retail investors still hold the majority of the float,… pic.twitter.com/YanrZpfcCG

— Vetle Lunde (@VetleLunde) August 16, 2024

While retail investors still hold the largest portion of these ETFs, institutional players have raised their share of assets under management (AUM) by 2.41 percentage points, reaching 21.15% in the second quarter.

In contrast, the Grayscale Bitcoin Trust (GBTC) saw a significant drop in institutional investment, whereas IBIT and FBTC experienced a notable rise in professional investor involvement.

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Lunde pointed out that the main institutional holders of spot BTC ETFs are market makers. Although Millennium and Susquehanna are the top holders, they have scaled back their positions compared to the first quarter.

This reduction is attributed to increased competition with Jane Street entering the market in the second quarter and more stable market conditions leading to lower yields, with annualized CME premiums falling from 14% on March 31 to 8.6% on June 30.