Bitwise predicts a significant rise in Bitcoin ETF adoption fueled by institutional investors.
Bitwise is predicting a significant increase in institutional investment in Bitcoin ETFs in the near future as major financial institutions, known as “wirehouses,” begin to offer Bitcoin ETF trades to their clients. According to Matt Hougan, Bitwise’s Chief Investment Officer, the initial interest in Bitcoin ETFs has primarily come from retail investors, hedge funds, and independent financial advisors. However, Hougan believes that this interest will soon extend to institutional investors, which he describes as an “IPO moment” for Bitcoin.
Bank of America’s Merrill Lynch and Wells Fargo have already started offering spot Bitcoin ETFs to their wealth clients, although this option is only available to clients who specifically request it. Morgan Stanley is also considering adding spot Bitcoin ETFs to its brokerage platform, indicating a growing interest among major financial players in cryptocurrency investment vehicles.
The introduction of Bitcoin ETFs has led to a “new era of price discovery,” according to Hougan. He explains that the current market dynamics are characterized by a significant demand for Bitcoin ETFs compared to the amount of Bitcoin mined daily and the anticipated impact of the upcoming halving event. This supply-demand imbalance could potentially result in a substantial increase in Bitcoin prices.
Hougan speculates that the surge in institutional interest could drive Bitcoin’s value to surpass Bitwise’s initial 2024 prediction of $80,000, potentially reaching figures between $100,000 to $200,000 or even higher.
On February 28, the trading volume of Bitcoin ETFs reached a new daily record of approximately $7.7 billion, surpassing the previous record of $4.7 billion. BlackRock’s iShares Bitcoin ETF (IBIT) played a significant role in this volume, with nearly $3.3 billion traded, more than doubling its previous record. The fund now manages over $9 billion in assets, making it one of the leading funds in terms of assets under management. Fidelity’s FBTC has also accumulated over $6 billion in AUM, while ARK/21Shares’ ARKB and Bitwise’s BITB have surpassed the $1 billion AUM mark.
In related news, Bitwise researcher Ryan Rasmussen has provided an outlook on the potential approval of spot Ethereum Exchange-Traded Funds (ETFs) in the coming months. He assesses the chances of approval at 50%, demonstrating a cautious yet hopeful stance on the expansion of cryptocurrency ETF offerings.
