CoinShares collated data from the first-quarter SEC 13-F filings to reveal bitcoin ETF trends. While institutional investors decreased their holdings for the first time since spot bitcoin ETFs launched, advisors actually increased their exposure quarter-over-quarter.
The pullback in institutional holdings was driven by hedge funds likely profit sharing on elevated bitcoin prices. Perhaps the biggest driver of institutional retreat was an unwind of the basis trade. The arbitrage trade made profits on the difference between bitcoin and bitcoin futures. CoinShares explained as the bitcoin futures premiums compressed, it likely led to hedge fund retreat on less favorable profits. However, advisors actually stepped up their exposures, a notable trend.
“Advisor holdings increased in BTC terms quarter-over-quarter, while hedge funds cut exposure by nearly one-third, signaling, in our view, less short-term tactical exposure and more longer-term strategic ownership,” wrote Matthew Kimmel, digital asset analyst at CoinShares.
Image source: CoinShares
As of the end of Q1, advisors made up 50% of 13-F bitcoin holdings and 81% of those that filed. Hedge funds comprised the second largest cohort at 32%, a decrease from 41% in the final quarter of 2024. “Despite recent divestments, there is promise in the fact that advisor allocations are increasing, and the average institutional portfolio weighting still remains below 1%, leaving plenty of capital on the sidelines,” Kimmel explained.
As Longer-Term Trends Prevail, Look to BRRR for Bitcoin Exposure
Advisors and investors looking to harness bitcoin price potential and longer-term adoption trends should consider the CoinShares Valkyrie Bitcoin Fund (BRRR ). The fund provides exposure to bitcoin’s price movements with the ease of access through traditional brokerages. Through BRRR, investors can capture bitcoin price movements while avoiding many of the extra steps required with direct bitcoin investment, such as storage.
BRRR seeks to reflect the price performance of the CME CF Bitcoin Reference Rate – New York Variant, minus fees and expenses. This index uses the same six bitcoin exchanges as the CME CF Bitcoin Reference Rate. However, it calculates bitcoin’s price at New York Market close (4 p.m. ET).
The fund is a trust that passively holds bitcoin (meaning it’s physically backed). Shares held are tied to the value of the bitcoin held. It also is not an investment company, and therefore does not fall under the 1940 Act. The bitcoin held is custodied by Coinbase, BitGo, and Komainu, with private keys kept in cold storage. In other words, the means to access the bitcoin held by the custodians remains offline, disconnected from the internet. This provides an extra layer of protection from hacking.
