More pension funds, charities and companies are now looking at Bitcoin as a long-term, strategic asset, with in-built scarcity and increasing clarity around regulation meaning that Bitcoin is entering a "new era" of institutional interest, a report from Cartwright has suggested.

Cartwright's annual review found that over 700 institutional investors in the US are currently invested in Bitcoin, and it pointed out that this list is “far from exhaustive” and will quickly become out of date as more organisations seek exposure to Bitcoin.

In addition to this, it found that half of the top 25 hedge funds on the planet (in terms of size) have made significant allocations to Bitcoin, most of these which appear to have occurred during 2024, triggered by the launch of 11 exchange-traded Bitcoin funds in the USA.

Cartwright admitted that the picture is harder to understand more broadly, warning that "it is all but impossible to accurately gauge the extent of institutional exposure to Bitcoin in other parts of the world", as this sort of data is simply not yet publicly available.

However, there was some evidence of increasing interest in Bitcoin as an investment, as Cartwright pointed out that, according to the sixth Annual Global Crypto Hedge Fund Report by PwC and the Alternative Investment Management Association (AIMA), nearly 47 per cent of traditional hedge funds worldwide reported having exposure to digital assets in 2024, up from 29 per cent in 2023 and 37 per cent in 2022.

Given this, it said that whilst individuals seem to be in the latter stages of the early adoption phase, institutions seem to be in the early stages of the early adoption phase.

And Cartwright pointed out that it is not just hedge funds that are making big moves in the Bitcoin space, as in May 2024, the State of Wisconsin Investment Board, or SWIB, one of the largest and best run public pension systems in the US, disclosed that it has invested $187m in Bitcoin exchange trade funds, or ETFs.

Whilst Cartwright acknowledged that this investment represents only a tiny fraction of the group's assets, it argued that “the mere fact that this public pension scheme dipped its toes into this growing investment space in the US is likely to encourage other public and private investors to follow suit”.

“And why wouldn’t they? After all, Bitcoin as an investment vehicle has outperformed traditional asset classes over almost any time horizon over the past decade and a half,” it stated.

Cartwright also pointed out that it previously advised the first UK DB pension trust to make an allocation to Bitcoin during 2024, marking the first-ever Bitcoin allocation within a corporate pension trust in the UK.

And this interest is growing, as Cartwright said that it has since spoken to a number of other institutions who are showing interest in learning about Bitcoin, and how it can complement a more 'traditional' portfolio.

Given this, the annual review is intended to provide readers with a fact-based understanding of Bitcoin to enable them to look through the noise of the price volatility caused by human emotion and see the opportunity in the asset.

However, industry experts were previously unconvinced that news that a UK pension scheme had bought into Bitcoin would spark a "stampede" into the asset class, with specific concerns raised around the idea of Bitcoin as a diversifier.

---