Can Bitcoin ETFs replace bonds in institutional portfolios?

The rise of bitcoins ETF

Bitcoin ETFs are investment vehicles that enable institutional and retail investors to obtain a bitcoin exposure without directly owning or controlling cryptocurrency.

From the US Securities Commission and Exchange approved a place ETF In January 2024, the market has grown significantly.

• In Q4 2024, institutional shares in American Bitcoin ETF have risen to $ 27.4 billion, which is $ 114% increase since the previous quarter. This rapid adoption shows a growing institutional interest in exposure to cryptocurrency.
• The main players such as Blackrock, Fidelity, Vaneck, Ark Invest and Grayscale are now administering bitcoin ETFs. Well -known offers include Blackrock’s Ishares Bitcoin Trust (IBT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC).
• The institutional acceptance of Bitcoin ETF is accelerated. Registered investment advisors (rias) have become Best holders Spot bitcoin ETF, reflecting growing confidence in the asset class. In June 2025, investment consultants held more than $ 10.3 billion in Bitcoin’s point ETFs, almost half of the total institutional assets.
• Family offices and wealth managers are also exploring crypto investments. And 2024 BNY mellon message It suggests that 39% of family offices are actively investing or considering crypto investment, powered by clients’ demand and strategic analysis.

ETFs facilitated the institutions to the Bitcoin market, while satisfying regulatory compliance and internal risks framework. Blackkrock recommends Portfolio assignment up to 1-2% in bitcoinsHe quoted his potential for diversification and increased return.

Bitcoins vs Bonds: Risk and Return

The compromise between the risk and return is central to compare Bitcoin ETF with bonds.

The historical performance of bitcoins was characterized by high volatility and substantial yields. We’ll see how:

• In 2024 Bitcoin returned by 114%, overcome Main classes of assets. However, its analized volatility is about 50%, which is significantly higher than links and stocks.
• Traditional bonds offer stability and predictable income. For example, since the middle of 2025, 20 -year -old Ministry of Finance Ishares ETF (TLT) Offered Thirty -day yield of approximately 4.55%, while the market with the total Vanguard ETF (BND) bond offered thirty days yield About 3.8%. These ETFs provide exposure to long -term cash registers and a wide combination of investment bonds, respectively attractive opportunities for portfolios aimed at income during increased interest rate and volatility.

Interesting is Classic portfolio 60/40For a long time as a scale for institutional and pension portfolios, it allocates 60% of shares and 40% of bonds. However, extended periods of low binding yields and inflationary pressures have caused challenges to re -evaluate this model.

In 2022 and 2023, the traditional bond portfolios suffered negative yields due to growing interest rates, while bitcoins recorded a revival of value. This asymmetry has forced institutions to re -evaluate the number of risks to bond reward.

Bitcoin ETFs are increasingly evaluated as potential alternatives for part with fixed intake of such portfolios. In 2025, the American Bitcoin ETF attracted more than $ 40.6 billion by the beginning of February, which is 175% year -on -year increase compared to the same period in 2024.

Meanwhile, there was a record influx of $ 6.35 billion to Blackrock’s iBit, which is his biggest monthly haul. These figures emphasize the growing momentum for bitcoins as a trustworthy accessory.

Did you know that? And 2024 studies ARK Invest and 21Shares found that adding a 5% allocation to bitcoins in the traditional 60/40 portfolio could increase the annualized revenues by more than 3%, albeit with an increase in volatility.

ETF strategy for retirement and pension funds

Pension and pension portfolios usually prefer capital maintenance, constant income and inflation.

These portfolio objectives are traditionally met by bonds and stable assets, are questioned by prolonged low yields and increasing inflation. As a result, some institutional investors with thought about it began to examine a small, controlled allocation of ETF bitcoins to increase revenues adapted to the risk and follow their conservative mandates.

Examples of these pension funds include:

• Wisconsin State Investment Board (SWIB): Swib published Initial investment of $ 163 million in Q1 2024 ($ 99 million in IBIT and $ 64 million in GBT). By the end of 2024, it has expanded its position to ~ $ 321 million to 6 million shares.
• Michigan State Investment Council: Michigan joined the Bitcoin trend ETF by becoming a remarkable holder of Bitcoin ETF (Arkb) Ark 21shares (Arkb), with an allocation around $ 7 million. Although relatively small, the investment reflects a careful, but clear step towards obtaining bitcoins exposure through regulated financial instruments that fit into the parameters of compliance with the regulations of large public funds.
• Fund of relief and pension of fire brigade Houston: One of the first public pension funds for experimenting with Crypto, Houston firefighters for relief and pension fund assigned Part of its Bitcoins portfolio via New York Digital Investment Group (NYDIG), before the ETF approval. This step, although modest, signaled early recognition of the asymmetrical return of bitcoins and its importance in the theory of a modern portfolio, especially for funds that manage long -term duties.

Did you know that? 16 June 2025, Ark 21shares Bitcoin ETF (Arkb) made Distribution of shares into 3: 1, which aims to improve the availability and liquidity without changing its investment strategy or net value of assets. This metonymic step reflects the growing demand of investors and the increase in bitcoins around $ 100,000 has strengthened the justification of the distribution.

Tokenized bonds and crypto -firm income

These are alternatives to bitcoin ETFs that receive institutional attention, such as tokenized solid income.

These are traditional bonds and money market assets issued as digital tokens on blockchains. This innovation combines institutional assets with blockchain efficiency, such as automated settlement, transparency and programmability.

• Fund Buidl Blackrock: Launched in March 2024, Institutional Fund Digital Liquity Blackrock USD (BUIDL) It tokenizes American treasures, cash and repo agreements on blockchain platforms, such as Ethereum and later Solana. Within six weeks, the tokenized fund collected ~ 375 million dollars AUM, quickly exceeded the offer of Franklin Templeton, and since March 2025 has spread to more than $ 1.7 billion on seven blockchains. Unique features include 24/7 shops and tokenized dividend divide.
• Franklin Templeton’s onchain USA Government Money Fund (Fobxx/Benji): Introduced in 2021 using Stellar and extended to Ethereum, Avalanche, Base, Aptos and Solana, Fobxx tokenizes US government securities, cash and reports according to UCITS regulations. With more than $ 594 million by AUM by February 2025 A ~ 4.5% yield is an example of the first regulated, tokenized fund of the cash market in Europe.
• Crypto -Backing Products -Backing: Many platforms experiment with crypto -bonded bonds (eg Maple Finance, Open Eden), decentralized debt tools secured by digital assets. Their aim is that in early stages is to offer revenues about excessively culminated loans by means of collateral to the Blockchain market and the view of the future, where the lending of digital assets clashes fixed income revenues.

Challenges and Reflections on the inclusion of Bitcoin ETF into financial portfolios

Bitcoin ETFs come with their own risks and one has to carry out their own research because none of this contains financial advice.

Bitcoins’ challenges ETF for institutions include:

• Volatility: Bitcoin price fluctuations can be significant and represent the risks for conservative investors.
• Regulatory uncertainty: The evolving regulatory environment can affect the performance and availability of crypto related investment products.
• Lack of yield: Unlike Bitcoin ETF bonds, they do not provide regular income that can discourage income investors.
• Operating risks: Risks related to linkage, accounting standards and ESG concerns can prevent the acceptance of large institutions. For example, the energy consumption of bitcoins remains for some point ESG compatible portfolio.

Bitcoin ETF offers a convincing opportunity for institutional investors looking for diversification and growth. Although they do not have to fully replace bonds in portfolios, they can complement traditional assets, especially in low -yield or inflation environment.

A balanced approach that includes a modest bitcoin ETF allocation can increase the performance of the portfolio in risk control. As the financial environment develops, institutions must remain agile and adapt their strategies to include developing assets such as bitcoins.