April 19, 2024
Bitwise Signals Continued Momentum for Bitcoin ETFs in Near Future
Bitcoin ETF

Bitwise Signals Continued Momentum for Bitcoin ETFs in Near Future

Institutional interest in Bitcoin ETFs is surging, with industry insiders predicting a significant influx of capital into the cryptocurrency market. According to Matt Hougan, Chief Investment Officer at Bitwise, introducing Bitcoin ETFs by major wirehouses could unleash an “even bigger wave” of institutional investment.

In a recent interview with CNBC, Hougan highlighted the initial surge in interest from retail investors, hedge funds, and independent financial advisors following the launch of Bitcoin ETFs. However, he emphasized that the next wave of capital inflows is expected to come from institutional investors, particularly as major wirehouses like Bank of America’s Merrill Lynch and Wells Fargo begin offering spot Bitcoin ETFs to their wealth management clients.

While currently available only upon client request, the move by these financial giants signals a significant shift towards mainstream adoption of cryptocurrencies within traditional finance. Additionally, Morgan Stanley is reportedly considering adding spot Bitcoin ETFs to its brokerage platform, further indicating growing institutional acceptance of digital assets.

Hougan described the introduction of Bitcoin ETFs as the cryptocurrency’s “IPO moment,” ushering in a new era of price discovery. He noted that the supply-demand dynamics are “off the hook,” with the demand for Bitcoin ETFs significantly outpacing the daily supply of newly mined Bitcoin, especially in anticipation of the upcoming halving event.

The Bitwise Bitcoin ETF (BITB) has seen remarkable success since its launch, recording the fourth-largest inflows totalling $1.11 billion over the past seven weeks, according to BitMEX Research. On February 28th, inflows reached a new all-time high of $676.8 million, signalling growing investor confidence in cryptocurrency-based investment products.

Among the leading Bitcoin ETFs, BlackRock’s IBIT and Fidelity’s FBTC have emerged as frontrunners, with $7.1 billion and $4.7 billion in inflows respectively. With institutional interest continuing to grow, industry experts anticipate a substantial surge in Bitcoin’s price.

Hougan suggested that Bitcoin could surpass Bitwise’s initial 2024 price prediction of $80,000 and reach anywhere between $100,000 to $200,000 or even higher. Converging institutional capital into Bitcoin ETFs could fuel this upward trajectory, potentially driving the cryptocurrency to new heights shortly.

As the cryptocurrency market undergoes a paradigm shift with the entry of institutional players, Bitcoin’s role as a legitimate asset class appears increasingly solidified. With traditional financial institutions embracing digital assets, the stage is set for Bitcoin to emerge as a global cornerstone of diversified investment portfolios.

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