ETF Applications Boost Institutional Interest: Bitcoin Holdings in Funds on the Rise

  • Institutional interest is on the rise following a wave of spot Bitcoin exchange-traded fund (ETF) applications by leading Wall Street firms.
  • As of July 7, the amount of BTC held by funds has significantly increased since BlackRock filed its first spot Bitcoin ETF application on June 15.
  • Seyffart noted that there are eight pending spot Bitcoin ETF applications.

The growing interest in Bitcoin from traditional financial institutions has increased the amount of Bitcoin held in funds, surpassing the peak reached in February 2023.

Increasing Bitcoin Holdings in Funds

bitcoin-btc

Institutional interest in cryptocurrencies among traditional financial institutions has been on the rise following a wave of spot Bitcoin exchange-traded fund (ETF) applications by leading Wall Street firms.

This development indicates the increasing acceptance of cryptocurrencies in traditional financial institutions and has the potential to contribute to wider adoption of Bitcoin and bring greater legitimacy to the crypto market.

According to data from the ByteTree financial research platform, as of July 7, the amount of BTC held by funds has significantly increased since BlackRock filed its first spot Bitcoin ETF application on June 15.

Specifically, Bitcoin fund investments rose by approximately 2.5% from the three-month low of around 830,000 reached a day before BlackRock’s application announcement on June 14, to nearly 850,000 BTC.

bitcoin-held-by-funds

The recent increase brought the amount of BTC held by funds to the highest level in the past six months, surpassing the previous peak of over 846,000 reached in February 2023.

Spot Bitcoin ETF Could Be “One of the Biggest Launches in History”

Regarding the potential impact of a spot Bitcoin ETF, Bloomberg Intelligence analyst James Seyffart stated that if such a product is approved, it could be “one of the biggest launches in history.” Speaking on July 5, Seyffart believed that an approved BTC ETF could prompt investors to reallocate billions of dollars from Grayscale Investments’ Bitcoin Trust (GBTC), Canadian Bitcoin ETFs, and other funds back into the leading cryptocurrency.

Seyffart noted that there are eight pending spot Bitcoin ETF applications launched by well-known traditional financial institutions such as WisdomTree, Invesco, VanEck, and Valkyrie.

Last week, the U.S. Securities and Exchange Commission (SEC) stated that recently filed Bitcoin ETF applications were “inadequate” and lacked sufficient clarity and comprehensiveness. BlackRock, the world’s largest asset manager, swiftly responded to the SEC’s remarks and resubmitted its application with additional details included for the regulatory body’s consideration.

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