The latest 13F filings have revealed a significant increase in institutional investment in Bitcoin ETFs, with 563 professional firms reporting a combined $3.5 billion in assets as of last Thursday. This marks a promising start for the newly launched Bitcoin ETFs, which have been gaining traction among institutional investors.

According to Matt Hougan, Chief Investment Officer at Bitwise, this is just the beginning. Hougan notes that professional investors typically take 6-12 months to evaluate cryptocurrencies, following a pattern of due diligence, personal allocation, and platform-wide allocation. He anticipates a surge in allocations, potentially reaching 1-5% of portfolios, dramatically expanding the pool of capital invested in Bitcoin.

The filings also revealed notable holders such as Bracebridge Capital, with $434 million in Bitcoin ETFs, Hightower Advisors, with $68 million, and others. While retail investors still dominate the holdings, accounting for 90-93% of the $50 billion assets under management, institutional investors are increasingly taking notice.

Hougan believes that the historical pattern of institutional adoption suggests a significant increase in professional investor participation is on the horizon. He points to the example of Hightower Advisors, whose current allocation of 0.05% of its assets could potentially increase to 1%, equivalent to $1.2 billion, following the typical pattern of behavior.

The launch of Bitcoin ETFs has been compared to the successful launch of the gold ETF in 2004, which gathered $1 billion in its first five days and had 95 professional firms invested in the product at its first 13F filing. The scale of ownership of Bitcoin ETFs is "off the charts" for new ETFs, according to Bloomberg ETF analyst Eric Balchunas.

Overall, the latest 13F filings suggest a promising start for institutional investment in Bitcoin ETFs, with a significant increase in allocations expected in the coming months. As more professional investors enter the space, the pool of capital invested in Bitcoin is likely to expand dramatically, potentially leading to a surge in growth and adoption.