May 17, 2024
Greg Cipolaro

Research Weekly - Answering the ETF Ownership Question


  • 13F filings reveal that non-filers, likely retail investors, make up the overwhelming majority of owners of spot bitcoin ETFs.
  • While it is common for non-filers to make up a large portion of a security’s ownership base, their share of spot bitcoin ETF ownership is much higher than some of the largest stocks and ETFs.
  • Hedge funds were the biggest owner group, but these positions were likely driven by hedged trading strategies rather than outright longs.
  • Investment advisors embraced bitcoin, showing significant interest in both the substantial dollar amounts and the wide variety of firms participating.
  • Notably absent was participation from wirehouses, which remain a big untapped opportunity going forward.

Unraveling the Spot Bitcoin ETF Ownership Mystery

Non-Filers, Likely Mostly Retail, Biggest Owners of Spot ETFs

Wednesday was the first quarter deadline for Form 13F share ownership reports. With the completion of Form 13F filings, submitted by institutional investment managers overseeing assets exceeding $100M, we now have a clearer picture of the investors behind these ETFs. Interestingly, the majority of shares are owned by non-filers, investors exempt from filing requirements. While 13F filings are mandatory for institutional investors with significant discretionary assets, the non-filers segment, which likely consists mainly of retail investors, accounts for 81% of the total investor base in spot ETFs. This group represents a substantial $47.6B in assets as of the close of the first quarter.

This amount is remarkable considering the investor base that has accessed bitcoin through various platforms like Coinbase, Kraken, or Gemini for years. It is possible that a significant portion of this total originated from assets in GBTC, which debuted on day one of ETF trading with $28.6B in AUM. Alternatively, some of it may have come from traditional market investors who favored the ETF format delivered through familiar methods, like their existing brokerage firm. Regardless of the reason, retail investors, serving as a proxy for non-filers, emerged as the predominant participants in the spot ETFs.

Additionally, there were notable omissions among expected holders such as Galaxy, Gemini, and Pantera, and the reported DCG position in GBTC reported by Bloomberg is stale due to Genesis bankruptcy actions (our analysis reflects this). Notably, despite speculations about BlackRock potentially including IBIT in its Global Allocation Fund (MALOX - $17.6B in AUM) and Strategic Income Opportunities Fund (BSIIX - $37.6B in AUM), neither fund appears to hold IBIT this quarter.

Non-Filers Over Index for Spot Bitcoin ETFs

It is common not to have a complete understanding of the holder base of a security, whether it is an individual company or an ETF. However, when we compare spot bitcoin ETFs to other investments, we observe that this particular segment, assumed to be retail investors, is disproportionately represented. For AAPL, the figure stands at 40.0%, NVDA at 30.0%, and MSFT at 28.7%. Looking at ETFs, SPY is at 43.5%, QQQ at 61.8%, GLD at 62.5%, and IAU at 42.2%. The 80.7% of spot ETF holders being unidentified is significantly higher compared to major securities and ETFs.

Hedge Funds Next Largest Owner Category, with a Caveat

The largest identified category of the spot ETFs are hedge funds, which account for $4.7B or 8.0% of the total spot ETF complex ownership. This comes with some big caveats though. First, this is holdings data as of quarter end, March 29th, and therefore is a snapshot of ownership on that day and that day only. Given how rapidly some hedge funds move investments around, there is a high probability that today those ownership levels are markedly different than they were at the end of the first quarter.

The other caveat is that knowing the businesses models of the specific funds classified as “Hedge Fund Managers”, very little of what is classified as ownership is likely being expressed as outright long positions. More likely is these positions are part of a hedged trade (basis arbitrage) or other market making or arbitrage activity. In total, 107 hedge funds reported spot bitcoin ETF positions.

Investment Advisors Hold $3.8B

Investment Advisors were the most diverse group of the bunch with 756 individual filers holding $3.8B in AUM. Some names were known or expected - Horizon Kinetics ($974M) was previously a big holder of GBTC, as was ARK Investment Management ($206M), and Van Eck Associates ($98M) and Franklin Resources ($31M) came about through the launch of their ETFs. That being said, the investment advisors that report to own spot ETFs is highly diverse.

Holding Companies Are Essentially Susquehanna

There is really only one investor that matters in the Holding Company classification (Bloomberg’s definition), SIG Holdings, LLC, the parent of Susquehanna International Group. SIG is prolific across the bitcoin investment landscape, owning nearly every ETF, the BITO futures ETF, and the BITX leveraged futures ETF. Our guess is that that SIG's investment activities go beyond simple long positions, potentially involving hedging, arbitrage, or market marketing strategies, resembling more of a hedge fund approach.

Brokerages Dominated by Two Firms

Brokerages collectively hold $1.2 billion in spot bitcoin ETFs, with a significant portion of that amount attributed to Jane Street and Morgan Stanley. Jane Street's $633 million reported ownership spans nearly every ETF, likely linked to their market-making endeavors. As an Authorized Participant in all spot bitcoin ETFs, Jane Street plays a crucial role in the spot bitcoin ETF market. On the other hand, Morgan Stanley's $272 million stake in ARKB and GBTC seems to stem from their investment management division (GBTC) and their brokerage business (ARKB). Other prominent brokerages venturing into bitcoin include IMC-Chicago, LPL Financial, and Cambridge Investment Research Advisors, a key player in providing financial services to independent advisors.

Pension Funds: SWIB Moving off Zero is a Notable Event

The State of Wisconsin Investment Board (SWIB) is one of the largest, longest standing, and most respected public pension funds. That’s why while it was the only pension fund to disclose ownership of spot bitcoin ETF, it was a notable event. Its $163M position across GBTC and IBIT is still small, however, just 10 bps of its year end 2023 AUM of $156B, but getting off of zero has garnered plenty of attention.

Banks Hold Very Little

Banks only have a minimal impact in terms of spot bitcoin ETFs, totaling around $70 million by the quarter's end. This group includes traditional wirehouses and full-service brokerage firms such as Bank of America, US Bancorp, and JP Morgan. Despite the massive potential offered by these institutions, with trillions in assets under management, their current involvement in this sector is close to negligible. This presents a promising opportunity for the industry, an enticing opportunity considering the scale of the companies.

A Comparison of Individual ETF Ownership Bases

By analyzing the ownership structure of different spot ETFs, we can uncover the markets each ETF has successfully (or unsuccessfully) penetrated. Hedge funds showed a preference for FBTC, IBIT, and BITB while showing less interest in GBTC and ARKB. On the other hand, Investment Advisors leaned towards ARKB and GBTC. The Investment Advisor allocation for certain funds is skewed a bit because of internal support by the fund’s sponsor – HODL’s Investment Advisor allocation is almost entirely Van Eck Associates' and EZBC’s influenced heavily by Franklin Resources' stake. Brokerages favor ARKB, but with the caveat that the allocation is almost entirely Jane Street, along with BITB and BTCO. Drawing concrete conclusions from BTCW's breakdown is challenging due to its smaller size and reported holder base.

Concluding Remarks

Since their launch, one of the most frequently asked questions has been about the buyers of spot bitcoin ETFs. Today, we have a more comprehensive view, though not without imperfections. Noteworthy support comes from Pension Funds and Investment Advisors, but the largest group by far are non-filers, likely predominantly retail investors. Hedge Funds have also embraced the asset class significantly, but likely as part of hedged trading strategies rather than outright long positions. There are still significant opportunities for growth within the spot ETF industry, particularly with wirehouses like Morgan Stanley, Bank of America, UBS, and Wells Fargo, who are major owners of GLD but have yet to fully engage with spot bitcoin ETFs. We believe these untapped opportunities, unlocking demand, could be an important price driver in the future.

Market Update

Bitcoin sprang to life this week with the release of the April CPI on Wednesday. The numbers, which came in-line with expectations, kept hopes alive for the possibility of rate cuts later this year, providing a significant boost to risk assets. Before Wednesday, bitcoin was caught in a turbulent trading window, weighed down by the halt in ETF inflows and the absence of any upcoming catalysts now that the halving event has passed. With some positive momentum reinstalled in bitcoin, there may be legs to the trade. With equity markets reaching new record highs, and bitcoin lagging well below its peak, there may be an opportunity for a catch-up trade on the horizon. We do expect the SEC to decide on spot ETH ETFs next week (by Thursday), which depending on their decision, could have major implications for much of the industry while leaving bitcoin unscathed.

Important News This Week

Regulation, Enforcement, and Taxation:

Two Brothers Arrested for Attacking The Ethereum Blockchain And Stealing $25 Million In Cryptocurrency - DOJ

What the DOJ’s First MEV Lawsuit Means for Ethereum - CoinDesk

US To Force China-Linked Firm to Sell Land Near US Missile Silos - Reuters

U.S. Treasury Says It Wants to Better Money Laundering Regulations Around Crypto, Other Illicit Finance - CoinDesk


Institutions Still Worried About Bitcoin's Near-Term Downside Risks, CME's Options Data Show - CoinDesk

Bitcoin Meme Coin Protocol Runes Sees Dim Traction Amid Falling BTC Prices - CoinDesk

Hong Kong’s Shaky Crypto ETF Debuts Dent Global Hub Aspirations - Bloomberg


Crypto Custody Tech Firm Fireblocks Plans NYDFS-Regulated Trust Company - CoinDesk

'CryptoDad' Giancarlo Joins Paxos Board - CoinDesk

El Salvador Mined Nearly 474 Bitcoins, Adding to State Crypto Holding, In Last Three Years - Reuters

Coinbase Shares Sink 9% on Report CME to Consider Listing Spot Bitcoin - CoinDesk

Upcoming Events

May 23 - SEC response deadline for spot ETH ETFs

May 31 - CME expiry

June 12 - FOMC interest rate decision

June 12 - May CPI report

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