The surge in Bitcoin ETF launches is revolutionising institutional investment in digital assets, yet arbitrage-focused hedge funds remain the most attractive investment option, according to research by digital assets hedge fund manager Nickel Digital Asset Management.
The research conducted on institutional investors and wealth managers from organisations in the US, UK, Germany, Switzerland, Singapore, Brazil and the UAE already invested in the sector has revealed that 77% of the respondents expect the flow of funds into Bitcoin ETFs to increase over the next 12 months, with 13% predicting dramatic increases.
WisdomTree lists physically backed Bitcoin and Ethereum ETPs on LSE
According to the findings, Bitcoin ETFs offer benefits such as lower costs, increased liquidity within established regulatory frameworks, and avoidance of the complexities and risks associated with self-custody. This widespread adoption is pressuring regulators to establish comprehensive regulatory frameworks, with 29% of respondents strongly agreeing.
Despite the advantages of Bitcoin ETFs, the research has highlighted that arbitrage-focused hedge funds are considered the most attractive way to invest in digital assets. ETFs and ETPs are deemed more appealing than a passively held diversified portfolio of digital assets or an actively managed diversified long-only portfolio. The least favoured approach was an actively managed diversified long-short portfolio.
Bitcoin halving to increase institutional investors, survey shows
Anatoly Crachilov, CEO and founding partner at Nickel Digital, stated: “The wider implications of the launch of crypto ETFs are that they helped legitimise the asset class, driving interest to both directional products such as ETFs, as well as the more sophisticated market-neutral strategies via specialized active managers.”
