Source: Blockchain Knight

A recent report released by River shows that as of December 31, hedge funds and registered investment advisors (RIAs) had exposure to BTC through ETFs to $34.3 billion, an increase of 357% last year.

The report pointed out that 458 RIAs hold BTC exposure, and their weighted average allocation ratio is 0.02%.

It is worth noting that investment consultants' exposure surged from $2.6 billion in the first quarter to $7.1 billion on December 31, an increase of 173%.

In addition, 52% of the top 25 RIAs in asset management scale hold BTC. However, as of December 31, only 3% of U.S. investment consultants have allocated BTC.

At the same time, the size of BTC held by hedge funds increased by 455% last year, from $4.9 billion in the first quarter to $27.2 billion. The report pointed out that as of December 31, only 143 of the more than 30,000 hedge funds had invested in BTC.

Unlike previous cycles, the current bull market is mainly driven by the accumulation of institutional investors. The report shows that individual investors sold 525,000 BTC in 2024.

As the same time individual investors left, funds and ETFs bought 519,000 BTC, while enterprises added 374,000 BTC to their vaults, an increase of 31% over 2020.

According to the report, this shift in overweight model, coupled with growing interest from hedge funds and RIA, suggests institutions are driving BTC prices to rise.

The report emphasizes that the adoption rate of BTC is only 3% of its full potential, which comprehensively considers the total target market, inadequate institutional allocation and global holdings.

Considering that the global wealth market is US$900 trillion, BTC accounts for only 0.2% of it.

However, the report added that BTC's target market value can reach $225 trillion, an estimate based on its potential market for store of value assets. This means that BTC is currently less than 1% of its target market.

In addition, institutional exposure to BTC accounts for only 0.006% of the $128 trillion fund allocated by U.S. investment advisers, which is much lower than the estimated fair value.

The report states: "To increase the proportion of BTC allocation by institutions to its current share of global wealth (0.2%), it is necessary to increase risk exposure by 36 times, equivalent to US$249 billion in investment."

The report also emphasizes that less than 4% of the global population holds BTC, and the number of individual holders may increase as people become aware of the benefits of BTC.