Family offices are showing a distinct inclination toward exchange-traded funds (ETFs) focused on Ethereum (ETH) relative to those centered on Bitcoin (BTC), even though broad institutional adoption in this asset class is still in its early stages.
Emerging trends in institutional investment indicate a nuanced divergence in how different investor segments approach cryptocurrency exposure.
Data insights from Bitwise, analyzing asset allocations up to December 31st, 2024, reveal this preference vividly.
Family offices and trust entities have allocated 0.62% of their managed assets (AUM) into spot Ethereum ETFs, a figure significantly surpassing the mere 0.13% directed towards spot Bitcoin ETFs.
This allocation ratio translates to nearly five times the proportion dedicated to Ethereum versus Bitcoin within this particular category of investor.
It is crucial to emphasize that these figures represent proportional allocations, not the absolute amounts invested.
This difference highlights contrasting undercurrents within institutional demand for these two dominant cryptocurrencies.
While Bitcoin maintains its lead in terms of total institutional AUM, attracting larger investments from entities like hedge funds and investment advisors, Ethereum appears to resonate more strongly with smaller, potentially more adaptable investors, such as family offices.
These varied investment choices are also symptomatic of broader differences in investor risk profiles and strategic approaches within the broader ETF market for digital assets.
Proportional Preference for Ethereum ETFs in Family Office Allocations
Data analysis by Bitwise, looking at holdings from December 31, 2024, shows a big difference: family offices and trusts have put 0.62% of their assets under management (AUM) into spot Ethereum ETPs, which is much higher than the 0.13% they put into spot Bitcoin ETPs.
This proportion signifies that, within this specific investor segment, Ethereum ETPs capture nearly five times the allocation share of their Bitcoin counterparts.
It’s crucial to note that this percentage reflects relative proportions rather than absolute investment values.
Contrasting Investor Profiles Across ETP Markets
A closer examination of Bitcoin ETF ownership reveals that hedge funds constitute the largest segment, holding 36.97% of AUM, closely followed by investment advisory firms at 33.11%.
Brokerage houses contribute an additional 14.91%.
Collectively, these entities, along with smaller investors such as banks and pension funds, account for over 85% of total Bitcoin ETF allocations.
Conversely, Ethereum ETF ownership presents a more evenly distributed landscape.
Brokerage firms account for 25.25% of AUM, investment advisors for 29.79%, and hedge funds for 24.74%.
Notably, a substantial “Other” category, encompassing 16.96% of Ethereum ETF AUM, suggests a wider array of institutions and potentially different types of investors participating in the Ethereum ETF market compared to Bitcoin.
Limited Engagement from Banks, Pension Funds, and Private Equity
The involvement of banks and pension funds remains limited in both Bitcoin and Ethereum ETFs.
Bitcoin ETFs see 1.27% and 1.02% of their AUM derived from banks and pension funds, respectively, while Ethereum ETFs attract 0.62% and 0.90% from these sectors.
Private equity firms similarly demonstrate cautious engagement, allocating 2.90% to Bitcoin ETFs and 1.11% to Ethereum ETFs.
Despite family offices’ stronger preference for Ethereum ETFs proportionally, their overall investment volume is still relatively minor when considering the entire spectrum of institutional engagement in cryptocurrency ETFs.
Venture capital firms and insurance companies currently exhibit negligible investment in either Bitcoin or Ethereum ETFs.
Divergent Leadership Among Top Institutional Holders
Furthermore, the leading institutional holders are distinct for Bitcoin and Ethereum ETFs, showcasing separate dominant forces within each market.
Millennium Management is the largest Bitcoin ETF holder with $4.42 billion in holdings, followed by Brevan Howard, Jane Street, and Goldman Sachs.
Within the Ethereum ETF domain, Goldman Sachs leads with $477 million, followed by Jane Street with $450 million and Millennium Management with a smaller $182 million position.
Ethereum ETFs Attract a Distinct Institutional Segment
While certain prominent institutions, such as Jane Street, D.E. Shaw, and Brevan Howard, feature among the top holders for both Bitcoin and Ethereum ETFs, indicating broad engagement across the crypto ETF spectrum, several firms appear exclusively as top Ethereum ETF holders.
These include Elequin, HBK Investments, SG Americas Securities, and Almitas Capital.
Conversely, Capula Management and Horizon Kinetics hold significant Bitcoin ETF positions but are not among the top institutional owners of Ethereum ETFs.
Also Read: Ethereum ETFs Lack Investor Inflow as Bitcoin ETFs Gain Traction
