Before the ETFs, bitcoin ownership tilted more heavily toward retail investors, crypto-native funds and traders making tactical bets, Rasmussen said. ETFs gave financial advisers and other professional investors a familiar way to add bitcoin to traditional portfolios.
Those investors tend to approach bitcoin differently.
Rasmussen said a professional investor might allocate around 2% of a portfolio to bitcoin, while crypto-focused retail investors can have 20%, 30%, or more of their money tied to the asset. A crash, therefore, looks very different depending on who owns it.
“If it goes down 50%, my portfolio is only down 1%,” Rasmussen said in an interview, describing how an investor with a 2% allocation might view the decline.
There is also rebalancing. An adviser targeting a 2% bitcoin allocation may buy after a steep decline to bring the position back to its target weight. If bitcoin surges and reaches 5% of the portfolio, that…
