Ethereum ETFs Gain Favor Among Family Offices Outpacing Bitcoin Counterparts in Allocation

Summary

• Family offices show a stronger proportional preference for Ethereum ETFs compared to Bitcoin ETFs, allocating a nearly five times higher share of their assets under management to Ethereum ETPs, though this doesn’t reflect absolute investment value.

• Investor profiles differ between Bitcoin and Ethereum ETPs: Bitcoin ETP ownership is concentrated in hedge funds and investment advisors, while Ethereum ETP ownership is more broadly distributed across brokerages, investment advisors, hedge funds, and a significant “Other” category.

• While some top institutional holders invest in both Bitcoin and Ethereum ETPs, Ethereum attracts a more distinct group of secondary institutions, suggesting varied adoption patterns and investor preferences for each asset.

While overall institutional engagement in crypto exchange-traded products remains nascent, family offices are exhibiting a notable preference for Ethereum (ETH)-focused investment vehicles over those tracking Bitcoin (BTC).

This trend suggests nuanced approaches to digital asset exposure across different investor types within the institutional landscape.

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 this reflects relative proportions rather than absolute investment values.

This disparity underscores the contrasting institutional dynamics shaping the investment landscape for these two leading cryptocurrencies.

Although Bitcoin continues to command a larger share of total institutional AUM, encompassing significant holdings by hedge funds and investment advisors, Ethereum is proving more proportionally attractive to smaller, potentially more agile investment entities like family offices.

These varying allocation patterns also reflect broader differences in investor profiles and risk tolerance within the wider ETP market.

Divergent Investor Profiles in Bitcoin and Ethereum ETP Markets

Analysis of Bitcoin ETP ownership reveals hedge funds as the predominant holders, accounting for 36.97% of AUM, closely trailed by investment advisors at 33.11%.

Brokerage firms constitute a further 14.91%, collectively contributing to over 85% of total Bitcoin ETP allocations when smaller participants like banks and pension funds are included.

In contrast, the ownership structure of Ethereum ETPs presents a more balanced distribution. Brokerages represent 25.25% of AUM, investment advisors 29.79%, and hedge funds 24.74%.

Notably, a significantly larger “Other” category comprises 16.96% of Ethereum ETP AUM, suggesting a broader range of institutional participants in this market.

Banks and pension funds demonstrate relatively modest allocations to both Bitcoin and Ethereum ETPs.

Bitcoin ETPs draw 1.27% and 1.02% of their AUM from banks and pension funds, respectively, while Ethereum ETPs attract 0.62% and 0.90% from these sectors.

Similarly, private equity firms show limited involvement, allocating 2.90% to Bitcoin ETPs and 1.11% to Ethereum ETPs.

Despite the clear preference for Ethereum ETPs among family offices in relative terms, their overall allocation volume still constitutes a minor fraction of total institutional activity within the crypto ETP space.

Venture capital entities and insurance corporations currently exhibit negligible exposure to either Bitcoin or Ethereum ETP classes.

Distinct Institutional Leaders Emerge in Bitcoin and Ethereum ETP Holdings

The top institutional holders also vary notably between Bitcoin and Ethereum ETPs, revealing differing dominant players in each segment.

Millennium Management is the top Bitcoin ETP holder with $4.42 billion in assets, followed by Brevan Howard, Jane Street, and Goldman Sachs.

Within the Ethereum ETP sphere, Goldman Sachs leads with $477 million in holdings, followed by Jane Street at $450 million and Millennium Management with a smaller $182 million position.

Interestingly, certain institutions like Jane Street, D.E. Shaw, and Brevan Howard are prominent holders in both Bitcoin and Ethereum ETPs, indicating a broad engagement with the wider crypto ETP market across these established firms.

Several entities, including Elequin, HBK Investments, SG Americas Securities, and Almitas Capital, appear exclusively among the top Ethereum ETP holders.

Conversely, Capula Management and Horizon Kinetics hold substantial positions in Bitcoin ETPs but do not feature among the leading institutional owners of Ethereum ETPs.

This differentiation suggests that while major asset managers and market makers participate actively in both the Bitcoin and Ethereum ETP markets, Ethereum appears to attract a more distinct and potentially specialized set of secondary institutional investors.

In conclusion, the data reinforces Bitcoin’s continued dominance in terms of overall institutional AUM but also highlights the emergence of a more diversified and widely distributed investor base within the evolving Ethereum ETP market.

Also Read: Galaxy Digital Transfers $100 Million Ethereum Holdings Market Speculation Arises

*Disclaimer*: We at Bitcoinleef.com present you with the latest information in the crypto market. However, this information should not be regarded as financial advice and viewers should consult their financial advisors before investing.