Institutional Investors Have Increased Their Investments in Bitcoin
The crypto market’s capitalisation fell by 14.9% to $2.2 trillion, with Bitcoin declining by 12.7% in the second quarter. Despite this downturn, interest from major investors has remained strong. According to 13F reports, the number of institutional investors in spot ETFs rose by 28% to 1,199 companies.
Their share of net inflows increased from 18.7% to 21.2%, reaching $3.1 billion.
Notable players in the financial market, including Goldman Sachs and Morgan Stanley, were active during the second quarter, contributing a total of $600 million. The modest size of this sum reflects the thorough vetting process required before admitting clients to new financial instruments.
Pension funds also show growing interest in Bitcoin, though they often invest through related assets due to legislative and other restrictions. For instance, the South Korean pension fund holds $45 million in Coinbase shares and $34 million in MicroStrategy shares, while Norges Bank Investment Management indirectly owns 2,446 BTC, equivalent to $27 per Norwegian citizen.
It’s important to note that 13F reports are filed with the SEC by large firms managing over $100 million in assets. When considering all legal entities investing in ETFs, some estimates suggest they account for roughly half of all inflows. This helps explain the resilience of ETFs during the largest correction of 2024: while Bitcoin’s maximum drawdown was 32%, ETFs saw only an 11% decline.
Institutional interest is a key indicator of Bitcoin’s long-term potential. Inflows from these investors remained strong despite temporary setbacks, such as the sell-off by the German government and impending repayments to Mt. Gox creditors. It is anticipated that their appetite for Bitcoin will grow even stronger in the third quarter.
Cryptocurrencies involve complexity and carry a high risk of rapid monetary loss due to volatility and changing regulatory landscape. It’s crucial to ensure you understand how cryptocurrencies operate and can withstand the potential high-risk scenario of losing your assets.
This campaign is not region-specific and should not be interpreted as an invitation to engage in cryptocurrencies operations.
