Bitcoin ETFs have gained significant traction as investment vehicles that provide exposure to Bitcoin without direct ownership. Following the SEC's approval of spot Bitcoin ETFs in January 2024, institutional holdings soared to $27.4 billion by Q4 2024, reflecting a 114% increase. Major players like BlackRock and Fidelity are leading this charge, with registered investment advisers now holding over $10.3 billion in these ETFs. Bitcoin, while volatile, offered a remarkable 114% return in 2024 compared to traditional bonds, which have struggled with low yields. This performance has led many institutions to reconsider traditional 60/40 portfolio allocations and explore Bitcoin ETFs as an alternative to fixed income. Examples of pension funds starting to invest in these ETFs include Wisconsin State Investment Board and Michigan State Investment Board. However, Bitcoin ETFs also come with risks, such as high volatility and regulatory uncertainty. Nevertheless, a modest allocation could enhance portfolio performance in today's low-yield environment, making them a compelling option for institutional investors.

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