In a recent appearance on CNBC’s ‘Half-time report,” Matt Hougan, Chief Investment Officer (CIO) of Bitwise Asset Management, shared insights into the growing interest and adoption of spot Bitcoin Exchange-Traded Funds (ETFs). This discussion comes at a time when BTC has surpassed expectations and hit a new all-time high of nearly $72,500.
Bitcoin ETF ‘Floodgates’ are just opening
CNBC’s Bob Pisani highlighted the unprecedented influx of approximately $20 billion into the market following the mid-January launch of 10 new spot Bitcoin ETFs, including $1.3 billion in Bitwise’s own BITB. This move has significantly broadened the investor base for Bitcoin and attracted a diverse group ranging from retail investors and registered investment advisors to hedge funds and venture capital funds.
According to Hougan, “it’s basically everyone everywhere at the same time,” indicating widespread and multifaceted demand for BTC exposure through these ETFs. He further revealed that “the initial buyers from the very beginning have been retail investors and registered investment advisors, but we are also seeing hedge funds, venture capital funds and others lining up.”
Crucially, Hougan has identified the potential for significant expansion of the investor base for Bitcoin ETFs in the near future. He foresees major asset management platforms – such as Morgan Stanley and Wells Fargo – opening up to these ETFs, which would mark a pivotal moment in cryptocurrency investing.
“Soon we think we’ll unlock major asset management platforms, the Morgan Stanley’s and Wells Fargo’s, and we’re even seeing companies lining up to get into these funds. So many floodgates are open, not all,” he explained. This expected shift is expected to unlock “huge flows” into Bitcoin ETFs, as advisors on these platforms may soon start recommending Bitcoin exposure to their clients.
“But we think that in the coming weeks or months, and it could be weeks, you’ll see these big wirehouses allowing requested investments into these Bitcoin ETFs, which means that the advisors can suggest to their clients that it could be useful for their overall portfolio to add a small amount of Bitcoin exposure,” Hougan added.
ETF buyers are long-term investors
Hougan’s statements underline a critical evolution in the perception and accessibility of Bitcoin as an investment vehicle. The ever-expanding investor base, initially dominated by retail and institutional investors, is poised to welcome major asset management platforms and their clientele.
This transition, according to Hougan, could significantly increase the flow of capital into Bitcoin ETFs, increasing the integration of BTC into mainstream investment portfolios.
To allay concerns about BTC’s notorious volatility, Hougan argued that Bitcoin is “its own asset” and is currently in a price discovery phase. He highlighted investors’ maturity in this area, saying, “If you take out GBTC… investors increased their exposure when the price fell from $50,000 to $39,000, and they increased their exposure when the price rose to $72,000.”
This stable investment behavior, even despite the volatility, indicates a strong belief in Bitcoin’s long-term value. “They are steadily increasing exposure to Bitcoin and that gives me confidence that they are here to stay. I think most of them are long-term investors in this sector,” concludes Hougan.
At the time of writing, BTC was trading at $71,597.
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