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Registered investment advisors (RIA) pondering who are the market participants, beyond retail investors, adding bitcoin in significant fashion don’t need to look far. In fact, they can simply look in the mirror because data indicate RIAs have been devoted adders of bitcoin exposure.
Consider the findings from the second-quarter 13F filing season. The Form 13Fs filed with the Securities and Exchange Commission (SEC), provide insight on the moves made by large investors, including big wealth management firms, during the prior quarter. Confirming that many clients are crypto-enthused, wealth managers owned 167,274 bitcoin as of June 30, making them the largest cohort of professional investors owning bitcoin.
That extends a trend that gained some prominence in the first quarter and one that’s really been budding since spot bitcoin exchange traded funds came to market in the U.S. in January 2024. ETFs have made it easier and friendlier from a regulatory perspective for advisors to embrace bitcoin on behalf of clients. Custody platforms, sans Vanguard, allow advisors to purchase bitcoin ETFs and those products eliminate the need for digital wallets, cold storage and multi-factor authentication.
Interestingly, the aforementioned 167,274 bitcoin owned by RIAs only pertains to firms with at least $100 million in assets under management, so it’s entirely possible that bitcoin ownership among advisors is higher when accounting for smaller firms being in the game, too.
Advisors Buying Bitcoin in ‘Stealth’ Mode
As advisors know, one of the marquee cryptocurrency themes garnering ample attention this year is increasing use of bitcoin and ethereum as corporate treasury assets. That’s an important trend and one that bears monitoring, but it’s also overshadowing advisors’ bitcoin embrace.
“Between bull market price action, ongoing government action and policy, and the size of capital inflows from Microstrategy-esque (now Strategy) companies – there has been little room for other industry headlines,” according to CoinShares. “Yet, a quiet, encouraging trend developing in the background is the growing bitcoin exposure of financial advisors via US spot bitcoin ETFs. Self-reported investment advisors managing over $100m now hold the equivalent of 167k BTC, up over 30% QoQ, according to the latest round of SEC 13-F filing data.”
Itself an issuer of crypto ETFs, including a spot bitcoin product, CoinShares notes advisors are largely tapping ETFs to get bitcoin exposure. Bitcoin owners ought to pay attention to that trend because advisors typically don’t swap out of ETFs in a matter of days of weeks. Usually, they’re “sticky” ETF users.
“The aggregate of advisors carving a lasting sleeve of their client portfolios to bitcoin would be a giant leap in maturation in its usage as a store of value,” adds CoinShares. “The second-order benefit of passive, very sticky demand for a supply-limited asset is then of course a positive for investors, similar to the role gold plays as a standard allocation within alternatives buckets.”
Bitcoin Adoption on Solid Ground Thanks to Advisors
Much is made about bitcoin adoption at the corporate level and as a form of payment in “the real world”, but advisors are a source of adoption, too, and a credible, long-term source at that.
“The structural integration of Bitcoin into wealth management and institutional channels is underway, and this quiet, sticky base of demand appears more and more likely to have a growing impact on bitcoin market dynamics for years to come,” concludes CoinShares.
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