Data from ByteTree Asset Management has revealed that closed-end funds and exchange-traded funds (ETFs) focused on spot and futures trading in Europe, the US, and Canada have reduced their holdings of Bitcoin by 16,560 BTC ($409 million) this month, reaching a 17-month low of 826,113 BTC.
The decline in fund balances suggests a lack of institutional participation in the recent surge in Bitcoin. The Chief Investment Officer of ByteTree Asset Management noted that the global wealth management industry has been quiet on both Bitcoin and gold.
Markus Thielen, Head of Research and Strategy at Matrixport, said that fund holding data is meaningless as it only represents a small portion of the market, and other demand sources are driving up prices. He also suspects that USDC holders are converting their stablecoins to BTC.
Institutional investors have been a key driving force behind Bitcoin’s price rise over the past year, but the latest data indicates that they may be stepping back from the market. The reduction in Bitcoin holdings by closed-end funds and ETFs, which are popular investment vehicles for institutional investors, suggests that they may be becoming more cautious about the cryptocurrency.
While some analysts have pointed out that the decline in fund balances is just a small portion of the market, it is worth noting that institutional investors have played a significant role in Bitcoin’s recent surge. With the recent market correction, it remains to be seen whether institutional investors will return to the market or wait for more favorable conditions.