Over half of the top American hedge funds have disclosed exposure to newly launched spot Bitcoin exchange-traded funds (ETFs) in a year, as BTC/USD has significantly outperformed major stocks and indexes.
Data from investment firm River reveals that 13 out of the top 25 United States hedge funds owned Bitcoin ETFs by the end of Q1 2024.
Notably, Millennium Management held 27,263 BTC worth $1.69 billion, making up about 2.5% of its total assets under management worth $67.7 billion.
Other significant players include Schonfeld Strategic Advisors with 6,734 BTC and Point72 Asset Management with 1,089 BTC.
In contrast, some top hedge funds, such as Bridgewater Associates, AQR Capital Management, and Balyasny Asset Management, have yet to invest in Bitcoin ETFs.
Interestingly, Bitcoin’s growing acceptance coincides with a rise in cash reserves across U.S. companies.
According to an analysis by treasury advisory firm Carfang Group, the cash or cash equivalents held by corporations reached a record high of $4.11 trillion in Q1 2024.
Some companies, namely Reddit, Semler Scientific, JPMorgan, and Wells Fargo, have allocated a small portion of their cash reserves to Bitcoin or Bitcoin ETFs.
This trend indicates that U.S. firms, including hedge funds and corporations, have become more confident in treating Bitcoin as a viable asset for diversification and hedging against traditional market risks.
Bitcoin outperforming Apple, Tesla stocks in 2024
Wall Street’s interest in Bitcoin grows as the cryptocurrency fares better than top stocks and stock indexes.
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BTC’s returns in the first half of 2024 were about 94%. In comparison, the U.S. benchmark S&P 500 index rose 23%, while the Dow Jones Industrial Average grew 14% in the same period.
Even Apple and Tesla stocks underperformed Bitcoin, returning 10% and -29%, respectively, year-to-date.
However, Nvidia, which recently became the world’s most valuable publicly traded company, outperformed Bitcoin, rising by over 150% in the first six months of 2024 due to an ongoing artificial intelligence boom.
Veteran trader Peter Brandt anticipates Bitcoin’s relevance growing as a hedging asset, particularly against traditional safe havens like gold.
He noted that BTC’s market capitalization could rise 230% against gold after 2025.
Earlier this year, ARK Invest’s annual research report concluded that institutional portfolios aiming for maximized risk-adjusted returns should have allocated 19.4% to Bitcoin in 2023.
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