JPMorgan Analysis Reveals Institutional Trends in Spot Bitcoin ETFs

Institutional and Retail Ownership of Bitcoin ETFs

JPMorgan's recent analysis sheds light on the ownership structure of spot Bitcoin ETFs, indicating that institutional investors hold approximately 13% of these assets based on 13F filings for Q1 2023. When including other institutional investors not required to file, this figure rises to around 20%. Consequently, retail investors dominate with about 80% ownership, showing significant participation in new spot Bitcoin ETFs since their launch.

Hedge Funds' Influence

Hedge funds comprise nearly 8% of the institutional ownership in spot Bitcoin ETFs. This substantial involvement underscores their interest and influence within this financial segment.

Blackrock's IBIT: A Market Leader

Blackrock's IBIT ETF has emerged as a standout among new spot Bitcoin ETFs. It has attracted the most inflows since its inception, drawing capital away from the Grayscale Bitcoin Trust, which is known for high fees. IBIT is poised to surpass Grayscale as the largest Bitcoin fund globally and is already the most liquid spot Bitcoin ETF on the market.

Evaluating Liquidity Metrics

Liquidity assessment of Blackrock's IBIT utilizes two primary metrics. The Hui-Heubel ratio, which measures market breadth, shows a significantly lower figure for IBIT compared to Grayscale's GBTC, indicating better market breadth. Furthermore, IBIT demonstrates a lower deviation between ETF closing prices and Net Asset Value (NAV) than both Grayscale's GBTC and Fidelity's FBTC, marking it as highly liquid.

Conclusion: Blackrock's Growing Dominance

JPMorgan's analysis concludes that Blackrock's IBIT has established itself as the leading spot Bitcoin ETF in terms of liquidity, outpacing Grayscale. This leadership position could enhance its attractiveness to both institutional and retail investors, further solidifying its market presence.