Bitcoin BTC/USD exchange traded funds (ETFs) are being adopted by institutional investors at a pace that outstrips any other ETF in history, according to Matt Hougan, Chief Investment Officer at Bitwise Invest.
What Happened: Hougan’s research reveals that Bitcoin ETFs have attracted $17.5 billion in net flows since their launch in January, putting them on track to obliterate the previous record held by the Nasdaq-100 QQQs, which gathered approximately $5 billion in their first year.
“Bitcoin ETFs are the fastest-growing ETFs of all-time,” Hougan stated on social media platform X, emphasizing the unprecedented nature of this growth. “It’s not even close.”
Despite this record-setting pace, critics have argued that the surge is primarily driven by retail investors, pointing to the fact that institutions hold just 21% of current Bitcoin ETF Assets Under Management (AUM), based on Q2 2024 filings.
However, Hougan’s deeper analysis paints a different picture. Comparing Bitcoin ETFs to the ten fastest-growing new ETFs of all time, he found that Bitcoin ETFs are leading by a wide margin in terms of institutional adoption.
“That’s true whether you measure by number of institutions or AUM,” Hougan noted.
His research shows that after two quarters on the market, Bitcoin ETFs have attracted more institutional holders and AUM than any other ETF in history.
The only ETF that comes close is the Nasdaq-100 QQQs, but Hougan notes this is an “apples-to-oranges comparison” due to data availability issues.
Even so, Bitcoin ETFs have three times the number of institutional holders compared to QQQ at a similar point in its lifecycle.
Hougan argues that the perception of low institutional adoption is skewed by the enormous retail interest in Bitcoin ETFs.
“The ‘problem’ is that the retail adoption of bitcoin ETFs is so large it makes the institutional adoption seem small in comparison,” he said.
This rapid institutional adoption of Bitcoin ETFs could have far-reaching implications for the cryptocurrency market and traditional finance.
As more institutions gain exposure to Bitcoin through these regulated investment vehicles, it could lead to increased legitimacy and stability for the asset class.
What’s Next: The unprecedented growth and adoption of Bitcoin ETFs are likely to be a hot topic at the upcoming Benzinga Future of Digital Assets event on Nov. 19.
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