Wall Street financial giants are increasingly embracing the bitcoin (BTC) market through exchange-traded funds (ETFs).

Institutional adoption of Bitcoin ETFs is not only booming and far from mere speculation, but is backed by solid data revealing growing institutional interest in the most popular digital asset, according to Matt Hougan, director of digital asset investments at Bitwise

According to the executive, institutional investors are adopting bitcoin ETFs faster than any other ETF in history, debunking the belief that it is only a retail-driven phenomenon.

Data confirms that since launch in January this year, bitcoin ETFs have attracted $17.5 billion in net inflows, far surpassing the previous record set by the QQQ ETF (which tracks the Nasdaq 100 index) launched in 1999. By 2000, QQQ attracted $10 billion.

  Net flows into Bitcoin ETFs. Source: Farside.

The QQQ fund, managed by Invesco, includes the 100 largest non-financial companies listed on the NASDAQ. Despite its success, it is dwarfed by the speed with which bitcoin-based funds are raising money.

Criticism of bitcoin ETFs has not ended

However, this record growth has failed to silence critics, who argue that much of the flow is coming from retail buyers, rather than institutions, Hougan says.

As proof, they point to the 13F forms, which are quarterly reports filed with the United States Securities and Exchange Commission (SEC) by institutional investors who manage portfolios exceeding $100 million.

According to the latest data from Q2 2024, institutions hold only 21% of the assets under management of bitcoin ETFs, while the remaining 79% are held by retail investors. At first glance, this might seem unfavorable, the executive note

However, when comparing the institutional adoption of Bitcoin ETFs to other fast-growing ETFs, a different trend is revealed.

Hougan examined institutional ownership of the 10 fastest-growing new ETFs of all time, seen in the image below. Taking into account the number of institutional holders and total assets under institutional management after two quarters on the market. 

10 Fastest-Growing New ETFs of All Time. Source: Matt Hougan.

“Bitcoin ETFs are by far the leaders in terms of institutional adoption. This is true whether measured by number of institutions or assets under management.”

The only comparable ETF is QQQ, but the comparison is not entirely appropriate, given that QQQ was launched in March 1999 in a very different context, says the Bitwise executive.

It is worth remembering that Bitwise is one of the 11 ETFs approved in the United States , as reported by CriptoNoticias. The fund currently holds 37,611 BTC, valued at $2.3 billion. 

This puts the Bitwise Bitcoin ETF (BITB) in fifth place among ETFs with the largest assets under management, behind the ARK 21Shares Bitcoin ETF (ARKB).

The real “problem,” according to Hougan, is that retail adoption of bitcoin ETFs “is so large that it dwarfs institutional adoption by comparison.”

However, bitcoin ETFs are gaining traction among institutions faster than any other ETF in history, underscoring the growing interest and legitimacy that bitcoin is gaining in the financial world.