What happened?
Investment advisors have surpassed hedge funds to become the largest buyers of Bitcoin and Ether spot ETFs. Cryptocurrency is no longer just a speculative tool for retail investors or a few funds; it has gained recognition from professional financial practitioners and is being incorporated into mainstream asset allocation.
The inflow of Ether ETFs has even surpassed that of Bitcoin ETFs during certain periods, showing that market interest in Ether is growing. Analysts believe that the main driving force behind this trend is Ether's potential staking yield capabilities and its increasingly clear regulatory outlook.
The widespread embrace of crypto ETFs by financial advisors is largely due to the improved regulatory environment. After Wall Street began to view cryptocurrency as a tradable "security," the clarity of regulation has given investment advisors more confidence to recommend related products to their clients.
Investment advisors have become the biggest driving force behind crypto ETFs.
As the landscape of the financial world continues to expand, cryptocurrency is no longer a niche speculative tool. It is gradually crossing the chasm into the mainstream investment arena.
It is particularly noteworthy that investment advisors in the traditional financial system are becoming the key drivers behind this trend. Their large-scale purchases of Bitcoin and Ether spot ETFs not only represent a shift in fund flow from speculation to long-term allocation but also indicate that cryptocurrencies are gradually being incorporated into traditional financial asset portfolios, becoming mainstream investment tools.
Bloomberg ETF analyst James Seyffart pointed out that among all tracked groups, investment advisors have become the largest buyers of Bitcoin and Ether ETFs. In the second quarter, they invested over $1.3 billion in Ether ETFs, with holdings soaring 68% from the previous quarter; in the U.S. spot Bitcoin ETF, the total value of Bitcoin and Ether ETFs held by investment advisors even reached $17 billion.
Both of these figures far exceed the holdings of hedge fund managers, indicating that investment advisors have become the primary known holders of these crypto ETFs.
Fund managers are "people who work for the fund". They manage various assets to generate returns for all investors in that fund.
Investment advisors are "people who work for clients". They provide personalized advice to help clients achieve comprehensive financial goals.
Nevertheless, these data primarily come from the SEC's 13F filings, covering only about 25% of total ETF holdings, with the remaining 75% expected to still be held by retail investors. However, this is sufficient to demonstrate that investment advisors are actively guiding their clients into the crypto market.
**💡 What is a 13F filing? **
This is a report that U.S. SEC requires institutional investors with assets under management exceeding $100 million (such as large funds, banks, etc.) to submit quarterly, revealing their holdings of stocks, ETFs, and other assets.
Crypto ETFs become mainstream, with regulation and returns being key.
Analysts generally believe that the participation of investment advisors represents a shift in the flow of funds into cryptocurrency, from past short-term speculation to long-term, portfolio-oriented strategic allocation.
Vincent Liu, Chief Investment Officer at quantitative trading firm Kronos Research, believes that as more advisors incorporate crypto ETFs into their portfolios, cryptocurrencies will be seen as a tool that can effectively diversify risks, complementing traditional assets such as stocks and bonds.
Additionally, the strong performance of Ether ETFs also demonstrates their unique appeal.
Compared to Bitcoin ETFs, the inflow of Ether ETFs has even surpassed that of Bitcoin ETFs during certain periods. LVRG Research Director Nick Ruck pointed out that this flow of funds reflects strong market interest in Ether, primarily due to its potential staking yields and increasingly clear regulatory environment.
Geoffrey Kendrick, Global Head of Digital Assets Research at Standard Chartered Bank, also stated that revenue-generating Ether assets are still undervalued, predicting that Ether has tremendous growth potential in the coming years.
Conclusion: challenges remain in the future, but the trend is hard to reverse.
The future development of cryptocurrency ETFs will be influenced by the regulatory environment, in addition to market demand.
Although the U.S. has begun to release more friendly signals towards cryptocurrency, Kadan Stadelmann, Chief Technology Officer of the blockchain ecosystem Komodo Platform, warns that if future policy directions become conservative, it could negatively impact the market and even cause investment advisors to hesitate due to concerns over licensing issues.
Overall, the large-scale buying behavior of investment advisors has clearly conveyed one message: "Mainstream" is entering the world of cryptocurrency through Wall Street's channels.
This transition from early adopters to institutional adoption reflects a continuing increase in market confidence in cryptocurrencies. Although challenges may still lie ahead, this wave driven by professional investment advisors has laid a more solid foundation for the position of cryptocurrencies within the financial system.
References: cointelegraph, the block, the block
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