According to recent data from Bloomberg Intelligence, investment advisers represent the largest measurable group outside of retail actively purchasing Bitcoin and Ether exchange-traded funds.
James Seyffart, a Bloomberg ETF analyst, noted in a post on X that investment advisers are “dominating the known holders” of Ether ETFs, having invested over $1.3 billion or 539,000 Ether (ETH) in Q2—marking a 68% increase from the previous quarter.
Source: James Seyffart
A similar trend has been noted in US spot Bitcoin ETFs. Seyffart mentioned on Monday that “advisers are by far the biggest holders now,” possessing over $17 billion worth in 161,000 Bitcoin (BTC).
In both scenarios, the holdings from investment advisers were nearly twice that of hedge fund managers.
However, Seyffart cautioned that these figures were derived from data submitted to the SEC, which only reflects a small portion of all spot Bitcoin ETF holders.
“This data primarily consists of 13F filings, representing about 25% of the Bitcoin ETF shares. The remaining 75% belongs to non-filers, largely retail investors,” he added.
Crypto ETF data tells a story, analysts say
Vincent Liu, the chief investment officer at Kronos Research, indicated that this data reflects a transition from speculative investments to long-term, portfolio-based allocations.
“With their strategic positioning as top holders, they provide deeper liquidity and a solid foundation for the integration of crypto into global markets,” he explained to Cointelegraph.
Liu expressed that as more advisers start to adopt Bitcoin and Ether ETFs, these digital assets will be recognized as long-term diversification options within traditional portfolios, complementing equities, bonds, and other mainstream assets.
“As additional altcoins enter the ETF market and yield-bearing assets like staked Ether receive approvals, advisers can leverage crypto not only to diversify portfolios but also to generate returns, further driving broader and longer-term adoption.”
Room for advisers to lean further into crypto ETFs
Some have speculated that the involvement of financial advisers in crypto ETFs could surge as regulations are enforced. In July, Fox News Business forecasted that trillions of dollars could be introduced into the market through advisers.
Source: Daniel Batten
Pav Hundal, lead market analyst at Australian crypto broker Swyftx, told Cointelegraph that adviser holdings in Bitcoin ETFs have surged by approximately 70% since June, driven by a more favorable regulatory environment in the US, alongside an extraordinary demand for risk-oriented assets.
“We are likely still in the early stages of growth. As with any investment that gains momentum, you have early adopters and those who join later due to the fear of missing out,” he stated.
“This dynamic exhibits itself among both institutional and retail investors. With Ethereum approaching new all-time highs and US policymakers suggesting a softer monetary stance amid cracks in the labor market, the setup is favorable for advisers to delve deeper.”
Regulation to play a role in crypto ETF growth
Meanwhile, Kadan Stadelmann, the chief technology officer of the blockchain-focused Komodo Platform, conveyed to Cointelegraph that the data clearly indicates “Main Street, through their financial advisers, is seeking access to crypto markets through Wall Street.”
“Ether ETFs are experiencing similar success to Bitcoin ETFs, albeit on a smaller scale, indicating a transition from early adoption to institutional backing. We’re not merely discussing smaller Wall Street firms but the most prominent names like BlackRock and Fidelity,” he augmented.
The top holders of the Ether ETFs according to 13F data as of Q2. Source: James Seyffart
Nonetheless, Stadelmann believes that “regulatory realities” will influence the growth of financial advisers engaging in the crypto sector.
The US Securities and Exchange Commission initiated Project Crypto in July to promote blockchain innovation; additionally, the US House passed the Genius Act during the same period, representing a long-awaited regulatory clarity sought by crypto advocates.
“In lower Manhattan, crypto is increasingly perceived as an asset class rather than a revolution, and the movement among these major players has merely been echoed by financial advisers, who now feel bolstered by regulatory clarity,” Stadelmann stated.
Related: Altseason won’t start until more crypto ETFs launch: Bitfinex
However, Stadelmann expressed that if a less crypto-friendly administration were to come into power in the next election, it could present challenges.
“The approach toward crypto might include crackdowns, potentially paralyzing the institutional crypto market and instilling fear in financial advisers that they could risk their licenses if they provide such products,” he warned.
“That remains to be seen, and Democrats could leave the current state due to market pressures.”
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