Source: Bloomberg
Original title: Capula, Schonfeld, Point72 Among Hedge Funds Riding Bitcoin ETFs
Author: Isabelle Lee
Compiled by: BitpushNews Scott Liu
In the second quarter of 2024, traditional investors such as hedge funds, pension funds and banks continued to inject capital into Bitcoin exchange-traded funds (ETFs). US regulators have gradually brought Bitcoin into the mainstream market, and several well-known hedge funds have become major holders of Bitcoin ETFs.
Millennium Management is one of the most prominent buyers, according to Bloomberg's analysis of second-quarter filings with the U.S. Securities and Exchange Commission (SEC). The hedge fund, which manages $68 billion in assets, holds shares in at least five bitcoin ETFs, and although it has significantly reduced its holdings compared with the previous quarter, it is still the largest holder of most funds, including BlackRock's iShares Bitcoin Trust (IBIT).
In addition, Capula Investment Management , Schonfeld Strategic Advisors, and Steven Cohen's Point72 Asset Management also disclosed their holdings of Bitcoin ETFs in the report. In addition, market makers from the State of Wisconsin Investment Board to Hong Kong, the Cayman Islands, Canada, and Switzerland have participated in the purchase of Bitcoin ETFs.
According to Bloomberg data, as of the second quarter, there were 701 new funds holding Bitcoin spot ETFs, with a total of nearly 1,950 holders. Although Millennium, Capula, Schonfeld, SWIB and Point72 declined to comment on the matter, their participation clearly reflects the strong interest of traditional financial institutions in Bitcoin ETFs.
The Bitcoin spot ETF launched in January this year has exceeded expectations in terms of capital inflows and asset size. Including new entrants, the entire Bitcoin ETF market has attracted $17 billion in net inflows this year, of which BlackRock's IBIT fund has swelled to $20 billion. The existence of such ETFs provides ordinary investors with an easy way to trade Bitcoin.
Despite Bitcoin’s poor price performance in the second quarter, with a drop of nearly 13%, the increase in the number of holders is still encouraging. According to Noelle Acheson, author of the Crypto Is Macro Now newsletter, although not many financial advisors are currently allowed to recommend these ETFs to clients, there are still institutions such as Morgan Stanley that have begun to allow financial advisors to recommend Bitcoin ETFs to clients.
“This reflects investors’ conviction and their willingness to take the time to research these products,” Acheson said. “So far, Morgan Stanley is the only major institution that allows financial advisors to recommend a Bitcoin spot ETF, but it is likely that others will follow, bringing not only more demand but also a longer-term investment perspective.”
Additionally, the spot Ethereum ETF launched in July has attracted $1.9 billion in inflows, although this does not include the $2.3 billion outflow from the Grayscale Ethereum Trust (ETHE) following its conversion to an ETF.
It is worth noting that 13F documents are submitted quarterly by qualified institutional investment companies. These documents only represent the holdings at a certain point in time, so it is impossible to confirm the specific reasons why these fund managers hold ETFs. It is not ruled out that some of them are not firm supporters of Bitcoin, and may be trying to profit from the volatility of cryptocurrencies or hedge short positions through derivatives. In addition, some funds may purchase ETFs through basis trades, taking advantage of the price difference between the spot and futures markets without directly handling Bitcoin.
Among the buyers in the second quarter, the hedge fund Hunting Hill Global Capital also reported holding shares in the IBIT fund. The fund has been involved in the cryptocurrency field since 2016. Its founder and chief investment officer Adam Guren said: "One of our trading strategies is to provide liquidity for the ETF ecosystem. Given the current political factors, we expect more products to be launched in the United States, including options on Bitcoin ETFs, Solana ETFs, etc. These products will create more opportunities for our trading strategies."
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