The adoption of Bitcoin by institutional investors continues to gain momentum, with notable hedge funds like Point72, led by billionaire Steven Cohen, diving into the cryptocurrency market through spot bitcoin exchange-traded funds (ETFs). As of the end of March, roughly 13 out of the 25 largest U.S.-based hedge funds had stakes in spot bitcoin ETFs, according to data provided by bitcoin brokerage River.

Point72, managing a substantial $34 billion in assets and owned by Steven Cohen, who also owns the New York Mets, disclosed holdings of $77.5 million in the Fidelity Wise Origin Bitcoin Fund (FBTC) at the close of the first quarter, as revealed in a regulatory filing. This move by Point72 reflects a growing trend among major hedge funds to incorporate exposure to digital assets within their investment portfolios.

Joining Point72 in this venture are other prominent hedge funds, including Paul Singer's Elliott Capital and Izzy Englander’s Millennium Management. As of March 31, Millennium Management emerged as the largest institutional holder of spot bitcoin ETFs, with holdings valued at approximately $2 billion. The participation of these influential players signals a significant shift in the perception of Bitcoin and cryptocurrencies within traditional finance circles.

Data compiled by bitcoin brokerage firm River further illustrates the widespread adoption of spot ETFs among top hedge funds in the U.S. Out of the top 25 hedge funds, 13 opted to invest in these ETFs during the first quarter of the year. In addition to the aforementioned names, institutions such as Fortress Investment Group and Schonfeld Strategic Advisors are among the notable players entering the cryptocurrency arena through spot ETFs.

While the purchase of spot ETFs by hedge funds may indicate a long-term bullish outlook on Bitcoin, these investments can serve various purposes beyond speculation on price appreciation. Hedge funds may utilize spot ETFs for market making, hedging against other assets, generating yield, or even engaging in short-term trading strategies. The diverse range of applications underscores the growing sophistication and maturation of the cryptocurrency market.

As institutional interest in Bitcoin continues to evolve, driven by factors such as inflation concerns, macroeconomic trends, and growing acceptance of digital assets, the involvement of top hedge funds like Point72 and Millennium Management reinforces Bitcoin's status as an emerging asset class worthy of consideration within traditional investment portfolios.