Investment advisers are increasingly turning to Bitcoin and Ether exchange-traded funds (ETFs), with the latest data from Bloomberg Intelligence revealing that they are the largest trackable cohort outside of retail investors buying into these funds. According to Bloomberg ETF analyst James Seyffart, investment advisers have invested over $1.3 billion in Ether ETFs, equivalent to 539,000 Ether (ETH), in the second quarter of this year. This represents a significant increase of 68% from the previous quarter.
Source: James Seyffart
A similar trend is observed in US spot Bitcoin ETFs, with advisers holding over $17 billion of exposure in 161,000 Bitcoin (BTC). Seyffart notes that in both cases, the exposure from investment advisers is nearly twice that of hedge fund managers. However, it is essential to note that this data is based on filings with the Securities and Exchange Commission (SEC), which only accounts for about 25% of the Bitcoin ETF shares. The remaining 75% are owned by non-filers, primarily retail investors.
Crypto ETF Data Trends
Vincent Liu, Chief Investment Officer at Kronos Research, believes that the data signals a shift from speculative flows to long-term, portfolio-driven allocations. “As the top holders, their strategic positioning provides deeper liquidity and a lasting foundation for crypto’s integration into global markets,” he explained. Liu expects that as more advisers adopt Bitcoin and Ether ETFs, crypto will become a recommended long-term diversification tool within traditional portfolios, complementing equities, bonds, and other mainstream assets.
Liu also anticipates that the growth of crypto ETFs will lead to increased adoption, driven by the ability of advisers to use crypto not just for diversification but also to generate returns. “As more altcoins join the ETF space and yield-bearing assets like staked Ether gain approval, advisers can use crypto to drive broader and longer-term adoption,” he added.
Regulatory Environment and Growth Potential
Some experts speculate that the number of financial advisers in crypto ETFs could surge as regulations become more favorable. In July, Fox News Business predicted that trillions of dollars could flood the market through financial advisers. Pav Hundal, lead market analyst at Australian crypto broker Swyftx, notes that investment adviser holdings in Bitcoin ETFs have grown by about 70% since June, driven by a softening in the US regulatory context and strong demand for risk-on assets.
Source: Daniel Batten
Hundal believes that the growth of crypto ETFs is still in its early stages, with potential for further expansion. “We’re likely still only in the early chapter of growth. Like with any investment that starts to build momentum, you get two types of participants: those who arrive early and those who come later out of fear of missing out,” he said.
Regulatory Realities and Future Outlook
Kadan Stadelmann, Chief Technology Officer of the blockchain-based Komodo Platform, notes that the data indicates “Main Street, through their financial advisers, is seeking access to crypto markets through Wall Street.” Stadelmann expects that regulatory realities will play a crucial role in the growth of financial advisers in the crypto market. The US Securities and Exchange Commission’s launch of Project Crypto in July and the US House’s passage of the Genius Act represent significant steps towards regulatory clarity.
The top holders of the Ether ETFs according to 13F data as of Q2. Source: James Seyffart
However, Stadelmann cautions that the outcome of future elections could impact the regulatory environment, potentially leading to crackdowns on crypto and affecting the confidence of financial advisers. “The approach to crypto could include crackdowns, which could put a freeze over the institutional crypto market, and strike fear into the hearts of financial advisers that they could lose their licenses if they offer the products,” he said.
For more information, visit the original source link: https://cointelegraph.com/news/investment-advisers-boost-bitcoin-ether-etf-holdings?utm_source=rss_feed&utm_medium=rss_tag_bitcoin&utm_campaign=rss_partner_inbound
