Hedge Funds Keep Diversifying Portfolio With Bitcoin Exchange-Traded Funds (ETFs)

The recent 13F Securities Exchange Commission (SEC) filing for end of Q3 revealed that hedge funds such as Millennium Management, Capula

Institutional investors seeking exposure to bitcoin are increasingly turning to exchange-traded funds (ETFs). This preference was evident in the recent 13F Securities Exchange Commission (SEC) filings for the end of Q3, which revealed that several hedge funds boosted their holdings in U.S. spot bitcoin ETFs.

Millennium Management, Capula Management, and Tudor Investment all showed significant increases in their bitcoin exposure through ETF holdings.

The 13F filing is a mandatory quarterly report for institutional investment managers that handle assets worth more than $100 million. These filings provide valuable insights into the investment strategies and preferences of hedge funds and other institutions.

According to the filings, Millennium Management's holdings in Ishares Bitcoin Trust (IBIT) more than doubled from the previous quarter, reaching 23.5 million shares, which were valued at $849 million at the end of September.

The hedge fund also increased its holdings in Bitwise bitcoin and Ark 21shares bitcoin funds, bringing its total ETF holdings, including spot bitcoin and ethereum funds, to about $1.7 billion.

Macro hedge firm Capula Management also boosted its holdings in Fidelity Wise Origin Bitcoin and Ishares Bitcoin Trust to approximately $600 million, as indicated by the SEC filing.

Meanwhile, Tudor Investment, the hedge fund led by Paul Tudor Jones, increased its holdings of the Ishares Bitcoin Trust fund by five times, moving from 869,565 shares to 4.4 million shares.

These developments come as spot bitcoin ETFs have seen a strong performance in Q4, with some ETFs rising by about 35%. This performance is likely to further encourage hedge funds and institutional investors to maintain or increase their bitcoin investments.

The growing institutional interest in bitcoin ETFs is also evident in the increasing ownership of these funds. For instance, the world's largest asset manager, Blackrock, has played a crucial role in driving institutional adoption of cryptocurrencies by offering investors a conventional way to gain exposure to bitcoin through its Ishares Bitcoin Trust ETF.