(Bloomberg) -- When it comes to Bitcoin ETFs, it’s not just the retail trading crowd that’s taking the plunge. It’s now clear that hedge funds, pension funds and banks have also sprinkled capital into the exchange-traded funds after their blockbuster debut that was more than a decade in the making.

Among the most well-known buyers that have emerged are hedge funds like Millennium Management, which held around $2 billion worth of shares in at least four Bitcoin ETFs, as well as Steven Cohen’s Point72 Asset Management and Elliott Investment Management. 

Others ranged from the State of Wisconsin Investment Board to Bank of Montreal among firms crossing geographies from Hong Kong to the Cayman Islands, Puerto Rico and Switzerland. Following Wednesday’s deadline to file first-quarter 13F reports with the US Securities and Exchange Commission, roughly 1,000 filers held shares in the ETFs, according to a Bloomberg analysis of the filings. Market makers that trade the ETFs, like Citadel Securities, and quant-trading firm Susquehanna International Group also reported holdings of the funds. 

The reports only represent a snapshot in time at the end of the first quarter, and it’s impossible to know without confirmation why money managers were holding the ETFs. It’s likely not all of them are Bitcoin bulls. Some may have opened the position as part of a trade meant to profit from the cryptocurrency’s volatility or offset a short position in derivatives. Others may have bought the ETFs as part of a basis trade, a popular strategy which exploits differences in prices between spot and futures markets, without the inconvenience of dealing directly with Bitcoin directly. And some trading strategies are model-driven, meaning the investments aren’t indicative of any opinions regarding Bitcoin’s fundamental value. 

 Millennium, Point72 and SWIB declined to comment. Others did not immediately respond to requests for comment. 

Still, if there is anything to be gleaned from these first filings since the introduction of Bitcoin ETFs, it’s that no matter the reason, Wall Street is dipping its toes into the world’s largest digital asset.

“The 13F releases show that the growth of Bitcoin ETFs can’t just be attributed to retail traders buying in brokerage accounts,” said Stephane Ouellette, chief executive officer of FRNT Financial. “But clearly portfolio managers, institutional investors and banks have at least begun to test the waters on ownership.”

For now, though, retail investors still own most of the float in Bitcoin ETFs, according to Matt Hougan, chief investment officer at Bitwise Asset Management.

“We often see professionals make a small personal allocation before allocating on behalf of clients,” he wrote in a note. “They want to test things out before exposing their investors.”

BlackRock’s iShares Bitcoin Trust (ticker IBIT) was held by around 420 firms that filed 13Fs, by far the market leader after eclipsing all its peers in terms of inflows. More than 230 filers held the Fidelity Wise Origin Bitcoin Fund (FBTC). Grayscale Bitcoin Trust (GBTC) had over 620 13F investors for a total market value of around $8.4 billion, data compiled by Bloomberg show. 

Other ETFs that launched at around the same time in January have averaged just around three to five holders, according to data compiled by Bloomberg Intelligence’s Eric Balchunas. And according to Bitwise’s Hougan, when the first gold ETF was launched in 2004, initial 13F filings showed just around 95 professional firms invested in the product. 

“This is likely to continue to expand, as investment allocations of new assets often take place in stages, and many funds/platforms are still working on due diligence and onboarding,” said Noelle Acheson, author of the Crypto Is Macro Now newsletter. “Plus, investment interest will again pick up when the market does – it has been directionless for a few weeks.”

Over the past few months, market participants have been tracking the money flow into these ETFs with awe as they break one record after another. In February, a record $520 million stampeded into BlackRock’s IBIT in one day — which was among the largest daily intakes ever for any US ETF across all asset classes — only to be followed by a $612 million inflow the very next. 

The demand for the ETFs is undeniable clear. The reasons behind the purchase, not quite. 

For Ben Brocker, investment strategist at Legacy Wealth, which has around $450 million in assets under management, it’s simply a diversifier. His Minneapolis-based firm first invested in Bitcoin in 2020 through GBTC, before it converted into an ETF this year, then eventually landed with Fidelity’s Bitcoin fund. The firm allocates a modest 2%, given the cryptocurrency’s price volatility. Brocker said Legacy Wealth decided to “ride it out” and are now “much better on the other side of it.”

“Like everybody else, we were huge skeptics for years on Bitcoin, and then eventually we discovered a few things about it,” he said by phone. “We believe it’s a better monetary asset than gold for this digital age that we’re in. It’s mistakenly compared against other cash-flow investment assets like bonds, real estate or stocks. But I really think it needs to be viewed as a monetary asset.”

For others like Chad Koehn, chief executive officer at United Capital Management, who manages more than $500 million of discretionary assets, it was all about getting in with the right vehicle at the right time. Koehn, who is also a competitive rodeo athlete, is a firm believer that Bitcoin has something to offer that other assets can’t. Koehn became interested in Bitcoin shortly after it was created and officially made his first investment in 2013. 

“Why are we bullish on Bitcoin? The answer lies in the innovative ledger technology of Web3,” he said. “As for the competition mocking me, it doesn’t bother me at all. I think they’re naive to how rapidly digital ledger technology is revolutionizing business transactions, and how important digital asset classes are as a hedge on inflation and the debasement of currency.”

Read more: A Pension, Cowboy and Other Bitcoin ETF Buyers: Bloomberg Crypto

--With assistance from Denise Cochran and Matt Mancuso.

(Updates with more holders in third paragraph.)

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