Can the investment funds circulated in Bitcoin replace the bonds in the institutional portfolio?

The emergence of investment funds circulated in Bitcoin

Investment funds circulating in Bitcoin are investment vehicles that allow institutional investors and retail trade to be exposed to Bitcoin without owning or managing the cryptocurrency directly.

Since the US Securities and Stock Exchange Committee agreed to the Bitcoin investment funds in January 2024, the market has grown significantly.

• By Q4 2024, the ETFS institutional company in the United States Bitcoin increased to $ 27.4 billion, and 114 % He increases From the previous quarter. This rapid adoption displays the increasing institutional interest in exposure to the encrypted currency.
• The main players such as Blackrock, Fidelity, Vaneck, Ark Invest and Grayscale are now running in Bitcoin. ISHARES Bitcoin Trust (IBIT) is from Blackrock Bitcoin Trust (IBIT) and the wise Bitcoin box (FBTC) among the known offers.
• The institutional adoption of the Bitcoin qualifiers is accelerating. Registered investment advisers (RIAS) have become the major investment funds traded in Bitcoin, which reflects the increasing confidence in the assets category. In June 2025, investment consultants occupied more than $ 10.3 billion in investment funds circulating in Bitcoin, or nearly half of the total institutional assets.
• Family offices and wealth managers also explore encryption investments. A 2024 bny mellon a report It indicates that 39 % of one family offices are actively investing or considering encryption investments, driven by the customer’s request and strategic analysis.

ETFS has made it easier for institutions to enter the Bitcoin market while meeting organizational compliance and internal risk frameworks. Blackrock recommends allocating a wallet up to 1-2 % in Bitcoin, noting the ability to diversify and enhance the return.

Bitcoin against bonds: risks and return

The comparison between the risks and the return is central when comparing the investment funds circulating in Bitcoin with bonds.

Bitcoin’s historical performance was characterized by high fluctuations and big returns. Let’s see how:

• In 2024, Bitcoin returned 114 %, It surpasses performance Chapters of the main assets. However, its annual fluctuations are about 50 %, much higher than bonds and stocks.
• Traditional bonds provide stability and expected income. For example, as of mid -2015, ISHARES 20 Year Treasury Bond Etf (TLT) Display Return for thirty days about 4.55 %, while Etf Total Market Etf (BND) showed thirty days fruit From about 3.8 %. The investment funds circulating this exposure to a long -term treasury and a wide mix of investment bonds, respectively, provide attractive options for governor that focus on income during periods of high interest rates and market fluctuations.

Interestingly, the classic 60/40 portfolio, which has long been considered a standard for institutional and retirement governor, specializes in 60 % for shares and 40 % for bonds. However, long periods of low bond returns and inflationary pressures have prompted calls to rethink this model.

In 2022 and 2023, the governor of traditional bonds suffered negative returns due to high interest rates, while Bitcoin witnessed a return to value. This contrast has prompted institutions to reassess the calculus account and risk to allocate bonds alone.

Bitcoin’s investment funds are increasingly evaluated as possible alternatives to the fixed income part of these portfolios. In 2025 alone, the investment funds traded in the United States in Bitcoin attracted more than $ 40.6 billion of net flows until early February, an increase of 175 % on an annual basis compared to the same period in 2024.

Meanwhile, May 2025 witnessed a clear $ 6.35 billion in IBIT in Blackrock, the largest monthly month. These numbers highlight the increasing momentum behind bitcoin as a reliable supplement.

Do you know? 2024 Ticket By Ark Investt and 21shares found that adding 5 % customization to Bitcoin in the traditional 60/40 portfolio can increase annual revenue by more than 3 %, albeit with high fluctuations.

ETF strategies for retirement and pension boxes

Retirement portfolios and pensions usually give a priority to maintain capital, fixed income and inflation.

These wallet goals are traditionally achieved by the bonds and stable assets through the long returns and high inflation. As a result, some institutional investors who consider thinking about exploring the small ETF allocations that are controlled in Bitcoin began to enhance modified returns by risks while adhering to their conservative delegations.

Examples of these pension funds include:

• SWIB State Investment Board: SWIB has unveiled an initial investment of $ 163 million in the first quarter of 2024 ($ 99 million in IBIT and $ 64 million in GBT). By the end of 2024, its position expanded to approximately $ 321 million in 6 million shares.
• Michigan State Investment Council: Michigan join Etf Bitcoin by becoming a prominent holder of ARK 21Shares Bitcoin ETF (ARKB), with distribution From about $ 7 million. Although the investment is relatively small, the investment reflects a cautious but clear step towards obtaining Bitcoin’s exposure through organized financial tools that are commensurate with the criteria for compliance with public funds on a large scale.
• Houston firefighter and retirement box: One of the oldest general retirement boxes for the Crypto experience, the Houston Fire Fire and retirement box Dedicated Part of its wallet to Bitcoin via New York Digital Investment Group (NYDIG), even before ETF approvals. This step, despite its modesty, indicated early recognition of the possibility of asymmetric bitcoin back and its importance in the theory of modern wallet, especially for the money that manages long -term obligations.

Do you know? On June 16, 2025, The Ark 21shares Bitcoin ETF (ARKB) Executed Divide a share 3 for 1, with the aim of improving access and liquidity without changing its investment strategy or net asset value. This growing step reflects the increasing demand for investors, and the increase in Bitcoin exceeds $ 100,000 has strengthened the logical basis.

Distinctive bonds and fixed income supported by encryption

These are alternatives to Bitcoin Etfs that gain institutional attention, such as distinctive fixed income.

These are traditional bonds and money market assets issued as digital symbols on Blockchains. This innovation is mixed with institutional assets with Blockchain efficiency such as automatic leveling, transparency and programming.

• Buidl Blue Box: The Digital Fund for Digital Institutions (Buidl) was launched in March 2024 in March 2024, classifies the American treasury, cash agreements and repeated Blockchain platforms such as Ethereum, and Solana later. Within six weeks, the distinctive box raised about $ 375 million, by quickly exceeding Franklin Timbelton’s offers, and grew to more than $ 1.7 billion scattered across seven tools of cases in March 2025. The unique features include profit distributions around the clock throughout the week.
• Franklin Templeton’s Onchain Us US Money Fund (Fobxx/Benji): It was presented in 2021 using Stellar, and was expanded to Ethereum, Avalanche, Base, Aptos, Solana, Fobxx Tokeense Securities, Criticism and Return under Ucits. With more than $ 594 million AUM by February 2025 and return ~ 4.5 %, it embodies the first organized special market fund in Europe.
• Covered return products: Many platforms try encrypted bonds (for example, maple financing, open Aden), decentralized debt tools guaranteed by digital assets. While it is still in the early stages, their goal is to provide returns on excessive endurance loans using a warranty among the continuous blue, to inspect a future as the borrowing of digital assets borrows returns similar to fixed income.

Challenges and considerations during the merging of the investment funds circulating in Bitcoin in the financial portfolio

Bitcoin’s investment funds come with their own dangers, and one must do their own research, as none of this includes financial advice.

Bitcoin ETFS challenges include institutions:

• Volatility: Bitcoin fluctuations can be large, which poses risks for conservative investors.
• Organizational uncertainty: The sophisticated organizational scene can affect the performance and availability of investment products related to encryption.
• Lack of return: Unlike the bonds, the investment funds circulating in Bitcoin do not provide regular income, which may deter income investors.
• Operating risks: It can hinder the risks related to nursery, accounting standards and ESG adoption concerns by large institutions. Pitcoin’s energy consumption, for example, still attached to some of the ESG compatible portfolios.

Bitcoin’s investment funds provide a convincing opportunity for institutional investors looking for diversification and growth. Although it may not replace the bonds completely in the wallets, they can complement the traditional assets, especially in a low -yielding or inflationary environment.

The balanced approach, which includes modest allocation to the Bitcoin investment funds, can enhance the performance of the wallet while managing the risk. With the development of the financial scene, institutions must remain graceful, with their strategies adapting to the emerging asset categories such as Bitcoin.