Institutional Capital Surge Anticipated in Bitcoin ETFs as Major Wirehouses Step In
Summary:
Bitwise anticipates a larger influx of institutional capital into Bitcoin ETFs as major wirehouses begin offering Bitcoin ETF trading. The first wave of interest primarily came from independent financial advisors, retail, and hedge funds. Currently, Merrill Lynch and Wells Fargo have begun offering spot Bitcoin ETFs to clients who request the products. Bitwise's CIO, Matt Hougan, predicts institutional demand could push Bitcoin's price beyond Bitwise's initial 2024 prediction of $80,000, potentially hitting between $100,000 and $200,000 or even higher.
Institutional investors may soon trigger a greater influx into Bitcoin exchange-traded funds (ETFs), according to Bitwise, with this surge expected as major wirehouses start offering Bitcoin ETF trading. Bitwise's CIO, Matt Hougan, during his February 29 CNBC interview, suggested the initial interest in Bitcoin ETFs mainly came from independent financial advisors, hedge funds, and retail. He then compared the ETFs to Bitcoin's IPO, stating an imminent wave of institutional money.
Notably, among the largest wirehouses, Merrill Lynch (Bank of America) and Wells Fargo have begun providing spot Bitcoin ETFs for their wealth clientele, as per a Bloomberg report dated February 29. However, it is currently exclusive to clients requesting these products. There are also discussions that Morgan Stanley might consider the inclusion of spot Bitcoin ETFs on its brokerage platform.
According to Hougan, this development is leading to a "new epoch of price discovery." He described the supply-demand balance associated with the amount of Bitcoin ETFs purchased in comparison to Bitcoin's daily mining and the upcoming halving event as "unprecedented." Due to the high demand and limited supply, Hougan predicts the next wave of institutional demand might significantly drive up Bitcoin's price. He further speculated that Bitcoin might surpass Bitwise's initial 2024 prediction of $80,000 and potentially hit anywhere between $100,000 and $200,000 or even higher.
Bitwise's Bitcoin ETF (BITB) since its launch seven weeks ago has recorded the fourth-largest inflows of $1.11 billion, BitMEX Research reveals. Inflows peaked at $676.8 million on February 28, indicating an all-time high for the market. Leading the pack are BlackRock's IBIT and Fidelity's FBTC with flows of $7.1 billion and $4.7 billion respectively.
Published At
3/1/2024 3:19:20 AM
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