More than half of the top American hedge funds have reported investments in newly launched spot Bitcoin (BTC) exchange-traded funds (ETFs) over the past year, driven by BTC/USD’s significant outperformance of major stocks and indexes.
According to data from investment firm River, 13 out of the top 25 U.S. hedge funds had invested in Bitcoin ETFs by the end of Q1 2024. Millennium Management stands out, holding 27,263 BTC valued at $1.69 billion, constituting approximately 2.5% of its $67.7 billion in total assets under management.
Bitcoin ETF exposure across top 25 U.S. hedge funds. Source: River
Other notable players include Schonfeld Strategic Advisors, with 6,734 BTC, and Point72 Asset Management, with 1,089 BTC. Conversely, some leading hedge funds like Bridgewater Associates, AQR Capital Management, and Balyasny Asset Management have yet to venture into Bitcoin ETFs.
Interestingly, Bitcoin’s increasing adoption coincides with a surge in cash reserves among U.S. companies. Corporate cash or equivalents reached a record high of $4.11 trillion in Q1 2024, according to analysis by treasury advisory firm Carfang Group.
Cash holdings by U.S. companies in recent quarters. Source: Bloomberg
Several companies, including Reddit, Semler Scientific, JPMorgan, and Wells Fargo, have allocated a portion of their cash reserves to Bitcoin or Bitcoin ETFs, indicating growing confidence in Bitcoin as a viable asset for diversification and hedging against traditional market risks.
Bitcoin has outperformed major stocks like Apple and Tesla in 2024, attracting increased interest from Wall Street. BTC delivered returns of approximately 94% in the first half of the year, whereas the S&P 500 rose by 23%, and the Dow Jones Industrial Average grew by 14% during the same period.
Bitcoin relative growth. Source: LookIntoBitcoin
Despite Bitcoin’s strong performance, Nvidia emerged as the best performer among publicly traded companies, surging over 150% in the first half of 2024 due to the ongoing artificial intelligence boom.
In the context of Bitcoin’s role as a hedge against traditional safe havens like gold, veteran trader Peter Brandt predicts BTC’s market capitalization could rise by 230% compared to gold by 2025.
Earlier this year, ARK Invest’s annual research report recommended allocating 19.4% to Bitcoin for institutional portfolios seeking maximum risk-adjusted returns in 2023.
Note: This article does not provide investment advice. All investment decisions involve risks, and readers should conduct their own research before making any investment or trading decisions.