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

This season's institutional actions contrast sharply with price trends. Bitcoin's price fell about 14.2%, while institutional reported crypto holdings actually increased.

According to calculations by Bitcoin Strategy, institutional Bitcoin holdings grew from approximately 498,000 coins to about 536,000 coins, a quarter-on-quarter increase of 7.5%, while total ETF holdings decreased from about 1.297 million coins to about 1.211 million coins.

According to SoSoValue data, the U.S. spot Bitcoin ETF continued to experience net redemptions in the second quarter, with net outflows of about $2.4 billion and $4.5 billion respectively in May and June, with June setting the worst monthly record since its launch. Ethereum ETFs also saw a cumulative net outflow of about $700 million during the same period.

At the same time, chips are concentrating towards the top. 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 institutional holders of one product, IBIT, reached approximately 1,500, with net assets of about $47.35 billion.

Ethereum's Growth Rate Outperforms Bitcoin at the Banking Level

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

According to calculations from DWF Labs, measured by corresponding crypto asset quantities, Morgan Stanley's BTC exposure increased by 3.7% quarter-on-quarter in Q2, while ETH exposure grew by 18.6%. JPMorgan's BTC exposure grew by 12.2%, while ETH exposure surged by 67.3%. Both banks' ETH growth rates are significantly higher than those of BTC.

On an individual level, it is even more apparent. Morgan Stanley's ETHA increased approximately 202% to 4.6 million shares, JPMorgan's ETHA increased 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, around 29 times its previous amount.

However, in fact, the overall spot Ethereum ETF experienced net outflows in the second quarter. SoSoValue data shows that in April there was still about $356 million in net inflows, but in May and June there were net outflows of about $541 million and $529 million respectively, resulting in a total net outflow of approximately $714 million for the second quarter.

Jane Street Bought Back, Hedge Funds Shift Positions to Options

Last season, Jane Street cut its IBIT holdings by about 71%, and the market speculated it was bearish on Bitcoin. This season, it reversed direction and added about 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 does not necessarily mean a directional bet.

It is worth noting that the 13F only reports the quarter-end spot longs; if options were included, several institutions' pictures would also reverse.

Global macro hedge fund Brevan Howard cut its spot IBIT from 24.3 million shares to 7.21 million shares in Q2, reducing its holdings by about 70.4%. However, it simultaneously holds corresponding call options for about 7.23 million shares of IBIT and put options for 5.27 million shares.

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

UBS's direct holdings of IBIT only increased by about 12% to 407,890 shares, while the corresponding call options exploded from 80,000 shares to approximately 1.95 million shares, a quarterly increase of over 24 times, alongside a decrease of about 53% in put options.

In contrast, the actions of Paul Tudor Jones’s fund, Tudor, appear quite contradictory. On one hand, it increased its spot IBIT by nearly 20% to 688,500 shares, ending nearly a year of reductions; on the other hand, it cut its call options linked to IBIT by about 85%, from 998,000 shares to about 148,000 shares.

Institutions Diverging on Crypto Stocks

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

In the second quarter, Strategy broke the myth of “never selling coins”: at the end of May, it sold 32 Bitcoin for the first time to pay dividends on preferred shares; on June 29, the board authorized a Bitcoin liquidation framework of up to $1.25 billion.

The 13F cutoff was June 30, while a much larger sell-off occurred after the quarter, causing a narrative change regarding BTC as an asset proxy.

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 flipped and purchased 422,900 shares, increasing total holdings to 2.55 million shares, worth about $242.3 million. BlackRock also increased MSTR holdings to about 19.39 million shares, valued at approximately $1.69 billion. However, as the largest index issuer in the entire market, this increase by BlackRock may have been more of a passive allocation according to the index.

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

Additionally, Circle is among the few positively viewed stocks related to cryptocurrency. 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. In contrast, the two have completely opposite operations regarding Coinbase: Morgan Stanley reduced its holdings by about 550,000 shares, whereas ARK increased its holdings by about 5.8% to 2.51 million shares while also cutting about 12.8% from Robinhood.

It is worth mentioning that ARK’s weight in Circle dropped from about 3.34% in Q1 to 1.85%, although the number of shares has slightly increased; the decline in weight is mainly due to the dilution from building a new position in SpaceX.

Furthermore, Morgan Stanley significantly increased its position in Circle during Q2, but at the beginning of August, it cut its target price for CRCL from $106 to $38, believing that the USDC scale contraction exposed the sensitivity of Circle's reserve income, suggesting that the income structure will lean toward lower-margin transaction revenue.

New Money Enters for the First Time, Old Money Remains Steady

In Q2, Spain's Santander Bank first disclosed its holdings in Bitcoin and Ethereum ETFs, although its position accounts for a tiny fraction of its U.S. stock portfolio exceeding $10 billion. UBS's crypto exposure has also been rising quarter by quarter, with this quarter adding a position of about $1.5 million in the mining company American Bitcoin.

Morgan Stanley also established the Grayscale Solana Staking ETF and Fidelity Solana Fund in Q2, with market values of approximately $4.25 million and $2.26 million respectively; JPMorgan also set up the Bitwise Solana Staking ETF and repurchased XRP, which was cleared in Q1, through Bitwise and Grayscale's minimal holdings.

Additionally, investment advisory firm Edelman Financial Engines disclosed holdings 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 in its overall portfolio, it has already surpassed its holdings in Amazon of about $25 million.

Abu Dhabi's Mubadala and Abu Dhabi Investment Authority maintained approximately 14.72 million shares and 8.22 million shares of IBIT unchanged, totaling about $764 million, pausing their continuous accumulation over multiple quarters in Q2.

Harvard UniversityEndowment Fund holds about 3.046 million shares of IBIT, approximately $101.4 million, unchanged from the end of Q1, ending two consecutive quarters of reductions. Additionally, its holdings in gold products iShares Gold Trust and SPDR Gold Trust combined are about $171.2 million, already exceeding Bitcoin.

Signals of Changes in Institutional Crypto Allocation

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

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

Second, institutions are increasingly diverging in their views on crypto-related stocks, especially after Strategy began selling coins.

Moreover, Ethereum has emerged as a clear buy on the institutional end, with capital flows also shifting in Q3.

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

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