Institutional Bitcoin ETF adoption rises 27% in Q2 despite price slump

The institutional adoption of spot Bitcoin (CRYPTO:BTC) exchange-traded funds (ETFs) surged by over 27% during the second quarter of 2024, even as Bitcoin faced a recent price correction.

According to Vetle Lunde, a senior analyst at K33 Research, more than 262 new firms invested in spot Bitcoin ETFs, bringing the total number of professional firms holding these investments to 1,199 as of June 30.

This increase in institutional participation is significant because institutions hold large amounts of capital that can move crypto markets.

Continued institutional adoption is seen as a crucial factor for Bitcoin to reach new all-time highs.

However, despite the growing interest from institutional investors, retail investors remain the largest holders of Bitcoin ETFs.

Institutional investors accounted for 21.15% of the total assets under management (AUM) in Bitcoin ETFs in Q2, up from 18.7% in the first quarter.

Despite the rise in institutional adoption, Bitcoin has struggled to break past the $60,000 mark.

The cryptocurrency fell below $60,000 on August 14 and was trading at $58,370 as of August 15.

Contributing to this price slump, Bitcoin ETF inflows have been stagnant, with a slight positive inflow of $11 million on August 15, following a significant outflow of $81.4 million the previous day.

While Bitcoin ETFs accounted for about 75% of new investment in the cryptocurrency by February 2024, helping it surpass the $50,000 mark, the current stagnation in inflows and the struggle to push above $60,000 suggest that more significant institutional investment may be needed to drive Bitcoin to new heights.

The coming months will be crucial in determining whether the increased institutional adoption can lead to a price recovery and push Bitcoin to new all-time highs.