[DigitalToday reporter Yoonseo Lee] Bitcoin fell 14.2 percent in the second quarter, but institutional holdings of bitcoin spot exchange-traded funds (ETFs) rose 7.5 percent, according to compiled data.

On Aug. 19 (local time), blockchain outlet CryptoSlate reported that Bitcoin Strategy said, based on U.S. Securities and Exchange Commission (SEC) 13F filings, institutional holdings of bitcoin spot ETFs rose to 535,723 BTC from 498,389 BTC.

Over the same period, the number of institutions reporting bitcoin positions fell 6.8 percent to around 1,900 from about 2,000. The number of holders declined, but the size of investment by some institutions that remained in the market increased.

Moves by institutions diverged. Banks and some asset managers increased their weightings, while some hedge funds sharply reduced their ETF shareholdings. Some sovereign wealth funds, university endowments and advisory platform-related investors largely maintained holdings despite the price decline.

JPMorgan's holdings of BlackRock's bitcoin spot ETF, IBIT, rose 25.35 percent to 10,407,635 shares from 8,302,691 shares. The value as of June 30 was about $355.70 million. It is difficult, however, to conclude that JPMorgan made a roughly $356.00 million bet on a rise in bitcoin prices, because consolidated 13F filings can reflect combined exposure across client accounts, hedging trades and multiple trading desks.

Renaissance Technologies posted an even bigger increase. Its IBIT holdings rose 312.92 percent to 1,403,942 shares from about 340,000 shares. The holding more than quadrupled, with an end-of-quarter value of about $46.70 million.

Some institutions sharply cut exposure. UK hedge fund Brevan Howard's IBIT holdings fell 70.36 percent to 7,205,004 shares from 24,304,788 shares. It appears on the surface to be a bearish bet, but the same filing also included call options linked to about 7.23 million shares and put options linked to about 5.27 million shares. That is why it is difficult to judge that it largely unwound its bitcoin exposure based only on the disclosed shareholdings.

Citadel Securities showed a similar pattern. IBIT shareholdings fell 59.66 percent to 514,614 shares. It also held call options linked to about 24.65 million shares and put options linked to about 17.86 million shares.

Holdings by market makers need to be interpreted differently from those of typical investment institutions. Asset manager Jane Street's IBIT holdings surged to 24,878,191 shares from 5,872,212 shares, with an end-of-quarter value of about $828.20 million.

The figures may look like large-scale buying, but Jane Street is an authorised participant for IBIT and handles creation and redemption of ETF shares. As a result, the end-of-quarter holdings are more likely to be inventory generated in market making or hedging than a bet on price direction. The filing also included call options linked to about 34.00 million shares and put options linked to about 34.80 million shares.

Institutions with a strong long-term investment character maintained holdings. Mubadala Investment Company kept its 14,721,917 IBIT shares unchanged. The end-of-quarter value was about $490.10 million.

Harvard Management also maintained 3,044,612 shares, and Fortress Investment Group kept its 1,325,000 shares unchanged. Abu Dhabi Investment Council's holdings also showed little change at 8,218,712 shares. Bitcoin fell 14.2 percent during the quarter, but these institutions did not reduce their holdings.

Institutional holding statistics differ by survey because of differences in calculation methods. Bitcoin Strategy analysed, based on 13F filings, that institutions held 44.2 percent of assets in U.S.-listed bitcoin spot ETFs. CoinShares, by contrast, counted professional 13F filers' holdings in the previous quarter at 261,000 BTC, representing 20.8 percent, based on its own criteria. It means institutional holdings can vary widely depending on which filers and products are included.

In the third quarter, the key issue is whether long-term holding demand will expand, centred on sovereign wealth funds, funds and advisory platforms. Even if total institutional holdings are maintained, if a significant portion is trading inventory for market making, the durability of institutional demand could be tested again in the next downturn.