Q2 Wall Street Institutions' Crypto Holdings: Most Institutions Increase Positions Against the Trend, ETH Exposure Outperforms BTC Across the Board

Author: Zhou, ChainCatcher

August 14 is the statutory deadline for institutional investors to submit Q2 13F forms as required by the SEC in the United States. After the documents were disclosed, Wall Street's crypto holdings were once again laid bare.

This season's institutional actions contrast sharply with the price trends of cryptocurrencies. Bitcoin's price fell by about 14.2%, while the reported crypto holdings by institutions increased.

According to Bitcoin Strategy's calculations based on 13F data, institutional Bitcoin holdings rose from approximately 498,000 coins to about 536,000 coins, a quarter-on-quarter increase of 7.5%. During the same period, the total holdings of ETFs decreased from about 1.297 million coins to approximately 1.211 million coins.

According to SoSoValue data, the U.S. spot Bitcoin ETF experienced continuous net redemptions in Q2, with net outflows of approximately $2.4 billion and $4.5 billion in May and June, respectively, with June setting the record for the worst monthly performance since its launch. The Ethereum ETF also saw a cumulative net outflow of about $700 million during the same period.

At the same time, holdings are concentrating among the top players. The number of institutions reporting Bitcoin holdings decreased from about 2,000 to around 1,900. According to Bloomberg data, as of August 13, the number of institutional holders of IBIT reached about 1,500, with net assets of approximately $47.35 billion.

Ethereum Growth at Banks Outpaces Bitcoin

Previously, ChainCatcher noted in its Q1 holdings review that institutional interest in Ethereum allocation was increasing, with Jane Street, Wells Fargo, and JPMorgan adding Ethereum ETFs during the outflow phase. In Q2, this trend was confirmed on the banking side.

According to DWF Labs' calculations, based on the corresponding number of crypto assets, Morgan Stanley's BTC exposure grew by 3.7% quarter-on-quarter, while ETH exposure grew by 18.6%. JPMorgan's BTC exposure increased by 12.2%, and ETH exposure surged by 67.3%. Both banks' ETH growth rates significantly exceeded those of BTC.

On an individual level, the figures are even more striking. Morgan Stanley's ETHA increased by about 202% to 4.6 million shares, JPMorgan's ETHA rose by about 338% to nearly 1.17 million shares, and Bank of America's ETHA skyrocketed from about 67,500 shares to approximately 1.98 million shares, about 29 times the previous amount.

However, in reality, the overall spot Ethereum ETF saw net outflows in Q2. SoSoValue data shows that there was still a net inflow of about $356 million in April, but net outflows of approximately $541 million and $529 million occurred in May and June, respectively, totaling a net outflow of about $714 million for Q2.

Jane Street Bought Back, Hedge Funds Shift Positions into Options

Last season, Jane Street cut its IBIT holdings by about 71%, leading the market to speculate that it was bearish on Bitcoin. This season, it reversed course and added back approximately 24.9 million shares of IBIT, a quarter-on-quarter increase of about 324%, making it one of the largest buyers of the season. Currently, its spot Bitcoin ETF exposure is about $990 million, with approximately $828 million in IBIT.

As an authorized participant and market maker, its end-of-quarter inventory is related to subscriptions, redemptions, and hedging; a significant increase in spot holdings does not equate to directional bets.

It is worth noting that 13F only reports long positions in spot holdings at the end of the quarter; if options were included, the profiles of several institutions would also reverse.

Global macro hedge fund Brevan Howard reduced its spot IBIT from 24.3 million shares to 7.21 million shares in Q2, a decrease of about 70.4%. However, it simultaneously held call options corresponding to about 7.23 million shares of IBIT and put options for 5.27 million shares.

Graham Capital reduced its spot IBIT from about 926,000 shares to 259,000 shares during the same period, a decrease of about 72%, yet it held put options corresponding to about 1.74 million shares of IBIT, with a reported value of approximately $57.94 million. Multi-strategy giant Millennium reduced its spot IBIT from about 19.29 million shares to 9.69 million shares, a decrease of about 49.8%.

UBS's directly held IBIT only increased by about 12% to 407,890 shares, but its corresponding call options surged from 80,000 shares to approximately 1.95 million shares, a quarterly increase of over 24 times, while its put options decreased by about 53%.

In contrast, the actions of Paul Tudor Jones' fund Tudor appear contradictory, as it increased its spot IBIT by nearly 20% to 688,500 shares, ending nearly a year of reductions, while cutting its call options linked to IBIT by about 85%, from 998,000 shares to about 148,000 shares.

Institutions Diverge on Crypto Stocks

In the previous article, we mentioned that crypto-related stocks are becoming an unavoidable allocation option for institutions. Among these, Strategy is the most representative.

In Q2, Strategy tore open the myth of "never selling coins": at the end of May, it sold 32 Bitcoin to pay dividends on preferred stock for the first time, and on June 29, the board authorized a Bitcoin monetization framework of up to $1.25 billion.

The 13F cutoff was on June 30, but a more significant sell-off occurred after the quarter, changing the narrative around BTC proxy assets.

Documents show that Bank of America reduced its holdings in Strategy from about 3.97 million shares to about 1.18 million shares, cutting about 70%. Renaissance Technologies bought back 422,900 shares, increasing its total holdings to 2.55 million shares, valued at approximately $242.3 million. BlackRock also increased its MSTR holdings to about 19.39 million shares, valued at approximately $1.69 billion. However, as the largest index issuer in the market, BlackRock's increase may be more about passive allocation following the index.

Renaissance Technologies newly purchased 422,881 shares of Strategy, increasing its total holdings to 2.55 million shares, with a holding value of $242.3 million, a 20% increase. The Royal Bank of Canada increased its holdings by 46,000 shares of Strategy, currently holding about 385,000 shares, with a total value of approximately $37.2 million, an increase of 13.5% in holding percentage.

Additionally, Circle is one of the few related targets that are jointly favored. Morgan Stanley significantly increased its holdings from about 1.46 million shares to approximately 8.32 million shares, while ARK also slightly increased its holdings by about 1% to 4.56 million shares. For Coinbase, the two actions were completely opposite; Morgan Stanley reduced its holdings by about 550,000 shares, while ARK increased its holdings by about 5.8% to 2.51 million shares, while also cutting Robinhood by about 12.8%.

It is worth mentioning that ARK's weight in Circle dropped from about 3.34% in Q1 to 1.85%, but the number of shares actually increased slightly; the decline in weight was mainly due to the dilution from the new position in SpaceX, which enlarged the portfolio.

Furthermore, after significantly increasing its Circle holdings in Q2, Morgan Stanley cut its target price for CRCL from $106 to $38 in early August, believing that the contraction of USDC's scale exposed the sensitivity of Circle's reserve income, indicating that the income structure would shift towards lower-margin trading income.

New Money Enters, Old Money Stays Put

In Q2, Banco Santander in Spain disclosed its Bitcoin and Ethereum ETF holdings for the first time, although the position is minimal compared to its over $10 billion U.S. stock portfolio. UBS's crypto exposure has also been gradually increasing, and this season it added a position of about $1.5 million in the mining company American Bitcoin.

Morgan Stanley also established new positions in Grayscale's Solana Staking ETF and Fidelity's Solana fund in Q2, with market values of approximately $4.25 million and $2.26 million, respectively; JPMorgan also established a new Bitwise Solana Staking ETF and repurchased XRP, which it had previously liquidated in Q1, building a small position through Bitwise and Grayscale's XRP funds.

Additionally, investment advisory firm Edelman Financial Engines disclosed a position of about $34 million in spot Bitcoin ETFs, primarily allocated to BlackRock's iShares Bitcoin Trust (IBIT) and Grayscale-related products. Although this position remains small within its overall investment portfolio, it has surpassed its holdings in Amazon of about $25 million.

Abu Dhabi's Mubadala and the Abu Dhabi Investment Authority maintained approximately 14.72 million shares and 8.22 million shares of IBIT, respectively, totaling about $764 million, with the previous pace of increasing holdings paused in Q2.

Harvard University's endowment fund held approximately 3.0446 million shares of IBIT, valued at about $101.4 million, unchanged from the end of Q1, ending two consecutive quarters of reductions. Its holdings in gold products, iShares Gold Trust and SPDR Gold Trust, totaled about $171.2 million, surpassing Bitcoin.

Signals of Institutional Crypto Allocation Changes

Looking at this season's institutional actions together, several directional signals are taking shape.

First, ETF fund flows are decoupling from institutional behaviors, deepening the institutionalization of crypto assets.

Second, the divergence among institutions regarding crypto-related stock targets is increasing, especially after Strategy began selling coins.

Additionally, Ethereum has become a clear buy on the institutional side, with fund flows in Q3 also shifting accordingly.

According to SoSoValue data, the Ethereum ETF saw net inflows of approximately $365 million in July and about $243 million so far in August, totaling over $600 million in two months; the ETH price has risen from about $1,570 at the end of June to around $1,900 currently, an increase of about 20%.

Even the Ethereum treasury company BitMine is also strengthening, with its stock price rising from about $13.3 at the end of June to nearly $19, an increase of about 40%.