Giant funds are buying more BTC
Institutional investors tripled their holdings of spot BTC ETFs in Q4 of 2024, reaching $38.7 billion.
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Bitcoin stumbled to $93K before recovering. Meanwhile, the SEC received applications for several new crypto ETFs.
Major funds with $100M+ just reported sizable BTC buys. From Goldman Sachs to the Bank of Montreal — here are the institutions adding bitcoin.
A multibillion-dollar credit fund is set to get tokenized. Plus, more key numbers from around the cryptoverse.
MARKET BYTES
Markets wobble, but Ethereum shows signs of strength
For the third week in a row, volatility rolled through crypto markets, pushing a wide variety of tokens into the red. On Tuesday morning, bitcoin sank below $94,000, its lowest price since the beginning of the month, as Cardano, DOGE, and many other major cryptocurrencies saw losses before regaining ground by midweek.
One token experienced an especially large decline: Solana — which reached an all-time high of $300 in January — dropped to just $160 on Tuesday “following a series of controversies relating to meme coins based on its blockchain,” reports Decrypt.
What drove the early-week dip? One factor analysts pointed to was hotter-than-expected inflation data last week and Federal Reserve Chair Jerome Powell’s suggestion that interest-rate cuts are unlikely to resume any time soon.
Longer-term, however, many analysts remain bullish. A new Bernstein report suggested that the adoption of BTC by Wall Street and other big-money institutional investors could drive prices to new highs (more on that in our main story below).
Here are three more market stories you should know about…
Why Ether ETFs have outperformed BTC ETFs recently
In a reversal of recent trends, Ether exchange-traded funds (ETFs) have seen $393 million of inflows over the last month while bitcoin ETFs have seen outflows totalling $376 million. Despite traders’ new fondness for ETH investment products, ETH prices remain far below the all-time high of nearly $4,900 set in 2021, although they have rebounded roughly 30% from earlier this month.
But could ETH regain traction? A new network upgrade, called Pectra, is set to roll out in April, and it could help the original smart-contract compatible blockchain better compete against newer rivals like Solana.
According to the Block, derivatives markets are showing that many pro traders expect ETH prices to bounce due to both Pectra and signs that “investor attention is shifting away from Solana’s memecoin-dominated ecosystem.”
I want my ETF… Meanwhile, applications for new crypto ETFs continue to roll in. This week, the SEC acknowledged receipt of spot ETF filings from Nasdaq on behalf of CoinShares to create ETFs for Litecoin and XRP.
U.S. BTC miners grow share of network power
U.S.-based publicly traded bitcoin-mining firms have doubled their share of the total computing power used by the BTC network from last year to around 29%. according to a new J.P. Morgan report.
“The network hashrate is a proxy for competition in the industry and mining difficulty,” CoinDesk notes. “The Bitcoin network hashrate has risen about 6% so far this month, and has climbed 45% in the last 12 months.”
Miner success… According to a new report from the Perryman group, BTC mining in the U.S. has created annual economic benefits of $4.1 billion and is responsible for 31,000 jobs.
Hong Kong races to become Asia’s crypto hub
Back in 2022, Hong Kong outlined its ambitions to become a major center for the crypto industry, even as mainland China banned almost all crypto trading. In the years since, Hong Kong regulators have issued licenses for crypto-trading platforms and even launched spot crypto ETFs.
This week, Hong Kong’s Securities and Futures Commission announced a major expansion of permitted crypto activities. According to Reuters, Hong Kong is set to “establish new licensing regimes for over-the-counter trading in virtual assets and for custody services” and is “advancing on the regulation of stablecoins.”
Stable stakes… On Monday, a consortium including Standard Chartered and Animoca Brands announced that it would seek a license from the Hong Kong Monetary Authority to create a Hong Kong dollar-backed stablecoin.
BIG MONEY
Who are the $100M+ institutions buying BTC?
Slowly but surely, bitcoin is becoming an institutional investment darling. And it’s not just because of Strategy (formerly known as MicroStrategy).
Last week, some of the biggest asset managers in the world provided disclosures about their stock investments from the fourth quarter of 2024. And bitcoin ETFs were a major favorite, with billions of dollars allocated by buyers including Goldman Sachs, Wisconsin’s pension fund, the Bank of Montreal, and one of Abu Dhabi’s sovereign wealth funds.
“Institutional investors tripled their holdings of spot bitcoin ETFs in Q4 2024, reaching $38.7 billion, SEC filings show,” reports CoinDesk.
What were the biggest revelations? Let’s dive in.
First off, how do we know what these funds hold?
Each quarter, fund managers who oversee more than $100 million in public equities are required to disclose their holdings to the U.S. Securities and Exchange Commission. The most recent “13F” filings reflect portfolio changes made during the fourth quarter of last year, through Dec. 31.
These filings give investors valuable insight into how the largest portfolios are playing the market. Since the launch of spot bitcoin ETFs last year, the quarterly filings have also become a proxy for institutional adoption of digital assets.
To date, more than 1,000 funds that are required to file 13Fs have purchased spot bitcoin ETFs, and their cumulative holdings top $38.7 billion, up from $12.4 billion at the end of Q3 2024.
One of Abu Dhabi’s sovereign wealth funds made a big splash
Mubadala Investment Company, one of Abu Dhabi’s state-owned investment funds, disclosed purchasing $436.9 million worth of bitcoin ETF shares last quarter, making it the seventh-largest holder of BlackRock’s leading bitcoin ETF.
“The accumulation by sovereign wealth funds, pension funds, and other major institutional investors is just getting started,” said Bitwise senior investment strategist Juan Leon.
Big banks are adding to their holdings
After significantly growing its holdings last quarter, Goldman Sachs now owns around $2 billion worth of crypto ETFs, with around $1.6 billion in BTC funds and nearly $500 million in Ethereum ETFs.
The Bank of Montreal, which oversees more than $1.4 trillion in assets, disclosed a $139 million bitcoin ETF buy, increasing its holdings by more than 1,000% from the prior quarter. And the UK-based Barclays has also added $131 million of bitcoin ETFs to their holdings. (Important to note: These buys are largely on behalf of wealth management clients, and not for the banks themselves.)
Wisconsin’s state pension doubled its position
The State of Wisconsin Investment Board was already established as a significant buyer of bitcoin ETFs, after initially purchasing more than $160 million in shares shortly after the ETFs launched.
In the last quarter of 2024, the pension fund doubled its bitcoin ETF holdings to more than $321 million. Wisconsin isn’t the only state pension exploring BTC — the State of Michigan Retirement System also disclosed a $6.6 million position, and Florida and North Carolina are considering similar moves.
What about ETH?
Ethereum’s price action has lagged bitcoin and most other major tokens during the current bull cycle, but that hasn’t stopped the world's largest institutions from accumulating shares of spot ETH ETFs. During Q4, institutional ownership of Ethereum ETF shares rose sharply, from 4.5% to 14.8%, while institutional ownership of spot BTC ETFs declined slightly, from 22.3% to 21.5%.
The bottom line…
Crypto’s role as an institutional investment vehicle continues to build serious momentum.
In 2025, according to Bitwise CEO Hunter Horsley, we should expect to see increased inflows from major institutions, with more sovereign nations buying bitcoin, and more banks launching services aimed at opening bitcoin access to clients.
“It’s going to be a watershed year,” said Horsley.
NUMBERS TO KNOW
$6.3 billion
Size of credit fund, issued by finance giant Invesco, that is set to become tokenized with the help of a Singaporean blockchain. The onchain version of the fund will enable institutional investors to redeem proceeds via USDC. A November report from Invesco predicted that tokenized finance could expand to a $600 billion market by 2030.
$2 billion
Amount in convertible notes that Strategy (formerly MicroStrategy) is offering, with plans to use the proceeds for “general corporate purposes, including the acquisition of bitcoin,” The Block reports. As of Thursday, Strategy holds 478,740 BTC, worth around $46 billion.
5%
The share of public funds that a proposed law in Utah would allow the state’s treasurer to invest in digital assets. Utah is aiming to move swiftly to pass the legislation, and is one of more than a dozen states currently considering investing public funds into crypto.
TUNE IN
Understanding the major shift in the regulatory landscape
In the latest episode of “Evolving Money,” our podcast created in collaboration with Bloomberg Media Studios, Coinbase Head of U.S. Policy Kara Calvert explains how the tectonic shift in the regulatory landscape is paving the way for crypto to become as American as apple pie.
Listen today on Spotify, Apple, or wherever you get your podcasts.
TOKEN TRIVIA
When was Solana originally created?
A
2013
B
2015
C
2017
D
2019
Find the answer below.
Trivia Answer
C
2017
