Since the approval of spot bitcoin ETFs in the US, hedge funds have eclipsed rival institutional players to be among the largest holders, but most of them are not taking a “long-term” bet on the emerging asset class.

“For the majority of hedge funds buying the bitcoin ETF, this is just a trade, not a long-term investment. They are increasing their exposure to bitcoin ETFs primarily as a market structure play, not as a long-term directional bet on bitcoin,” said Louis LaValle, executive vice-president of hedge fund solutions at digital asset investment manager 3iQ.