Bitwise, a leading crypto-native asset manager, has announced that institutions holding assets worth trillions of dollars are gearing up to invest in spot Bitcoin exchange-traded funds (ETFs) by the end of June this year. This revelation comes from Matt Hougan, Bitwise’s chief investment officer, who shared insights in a March 9 investment memo distributed to investors.
Surge in Institutional Interest
The memo highlights that Bitwise is currently engaging in serious due diligence discussions with large corporations, major wirehouses, and institutional consultants. These discussions are focused on increasing their Bitcoin exposure in the upcoming months. Hougan pointed out that not only individual retail investors but also family offices, hedge funds, and venture capital firms are showing a keen interest in acquiring more allocations into spot Bitcoin ETFs.
The Growing Impact of Bitcoin ETFs
According to Hougan, the significant interest from institutional players in Bitcoin ETFs has played a pivotal role in driving up Bitcoin’s price by over 50% since the introduction of these ETFs on January 11. From a starting point of $45,603, Bitcoin’s price rocketed to $68,583, based on data from TradingView at the time of the memo.
Bitcoin ETFs have seen nearly $9 billion in net inflows since their launch, a trend that Hougan believes will only accelerate as the year progresses. He specifically predicts that the first substantial inflows from large institutions will occur in the second quarter of 2024, with momentum building as these entities grow more familiar with the products.
Bullish Outlook on Bitcoin ETFs
Hougan’s optimism about the potential of Bitcoin ETFs is not new. Earlier, on February 29, he expressed expectations of a “bigger wave” of institutional capital flowing into Bitcoin ETFs, which he believed would significantly boost Bitcoin’s price. BitMEX Research supports this enthusiasm, noting that Bitcoin ETFs have attracted net inflows of $8.89 billion since their inception, with BlackRock’s iShares IBIT fund leading in new inflows.
Record-Breaking Flows into Bitcoin ETFs
The influx of capital into Bitcoin ETFs has been remarkable, with Bloomberg ETF analyst Eric Balchunas highlighting the extraordinary figures for ETFs less than two months old. As of March 8, BlackRock’s Bitcoin ETF had surpassed MicroStrategy in terms of total Bitcoin held, boasting 197,943 BTC on its balance sheet, valued over $13.5 billion at current prices.
This significant interest from large financial institutions and the resultant inflow of funds into Bitcoin ETFs underscores the growing acceptance of cryptocurrency as a viable investment class. With expectations set for an increase in institutional participation, the second half of 2024 looks promising for Bitcoin and its associated investment vehicles.
