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Adviser holdings in Bitcoin ETFs rise, hedge fund stakes dip — Coinbase

Investment advisers have ramped up their stakes in spot Bitcoin exchange-traded funds (ETFs) during the second quarter of 2024, while hedge fund holdings have seen a slight decline, according to cryptocurrency exchange Coinbase.

It is likely that the rate of investment advisers holding spot Bitcoin 

ETFs is only going to increase further as “more brokerage houses complete their due diligence on these funds,”accordingto an Aug. 16 report published by Coinbase.

Proportion of institutional investment in spot Bitcoin ETFs. Source: Coinbase

The proportion of institutional holders labeled as “investment advisors” rose 3% during the second quarter of 2024, now accounting for 9% of total institutional investment. The exchange pointed out that this is just based on firms managing more than $100 million in assets, which are required to file the US Securities and Exchange Commission’s 13-F form.

It follows Cointelegraph recently reporting that Morgan Stanley authorized its 15,000 financial advisers to start recommending spot Bitcoin ETFs to high-net-worth clients.

However, Coinbase noted that “large inflows” might be delayed due to the summer period in the US (June to August), which can hinder financial advisers from attracting new clients right away.

While it explained that more people are on vacation during this time, it also reiterated that “price action might be choppy.” Since July 18, Bitcoin’s price has dropped 9.86%, trading at $59,132 at the time of publication

Meanwhile, the decline in hedge fund managers’ holdings is likely due to exploiting the price difference between spot Bitcoin ETFs and Bitcoin futures contracts, known as “trading the basis,” it explained.

Coinbase noted that Chicago Mercantile Exchange (CME) Bitcoin futures contracts grew 15% in the second quarter of 2024, reaching $2.75 billion.

The exchange highlighted that the “ETF complex” saw a total of $2.4 billion in net inflows from institutional investors throughout the second quarter, which it believes is a positive given the asset’s “underperformance” over the period.

Beginning the second quarter on April 1 near its all-time high of $71,333, Bitcoin’s price fell to $60,888 by June 30, representing a decline of about 14.6% for the quarter, according to CoinMarketCap data.

Since spot Bitcoin ETFs launched on Jan. 11, there has been $17.35 billion in total inflows, according to Farside data.

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