- Spot Bitcoin ETF approvals and due diligence by investment committees are key steps towards significant institutional crypto investment.
- With $12 billion already in ETFs, a global 1% portfolio allocation to Bitcoin could lead to $1 trillion in inflows.
In a recent statement, Matthew Hougan, Bitwise’s Chief Investment Officer, presented an optimistic outlook for Bitcoin, predicting that institutional investors might channel up to $1 trillion into the cryptocurrency via exchange-traded funds (ETFs). This influx is anticipated as part of a gradual shift towards embracing digital currencies in the financial mainstream.
1% Down; 99% to Go. Reflections on the ETF launch.
An excerpt from Bitwise CIO @Matt_Hougan's weekly memo to investment professionals.
Lately the crypto markets have been volatile, with bitcoin bouncing between $60,000 and $70,000. The media gets breathlessly worried about…
— Bitwise (@BitwiseInvest) March 27, 2024
Addressing the volatile nature of Bitcoin’s price, which has been oscillating between $60,000 and $70,000, Hougan advised investors to maintain composure and adopt a long-term perspective.
Despite the short-term fluctuations, he pointed to several significant developments on the horizon that could bolster Bitcoin’s value, such as the Bitcoin halving event and the potential approval of spot Bitcoin ETFs by major national account platforms, including Morgan Stanley and Wells Fargo.
Hougan underscored the importance of patience, noting that investment committees and consultants are still in the midst of conducting thorough due diligence on Bitcoin before committing to investments. This careful evaluation process is crucial for paving the way for future institutional investments in the cryptocurrency.
Despite the possibility of Bitcoin’s price experiencing “sideways” movement in response to minor shifts in market sentiment in the short term, Hougan remains confident about Bitcoin’s long-term prospects. He cited the cryptocurrency’s significant appreciation over the past 15 months and the favorable conditions for continued growth.
Related: Bitcoin and Ether ETNs Trading to Commence on London Stock Exchange in May
The approval of spot Bitcoin ETFs in January has significantly opened the doors for investment professionals to engage with the cryptocurrency, according to Hougan. He emphasized that the process of attracting more professional investors into the crypto space is expected to unfold over years rather than months.
Highlighting the remarkable $12 billion that has already flowed into ETFs since their introduction, Hougan characterized this as just the beginning of a much larger wave of investment.
He projected that a global 1% portfolio allocation to Bitcoin by wealth managers could result in approximately $1 trillion entering the market, suggesting that the current inflows represent merely the initial stages of a more substantial trend.
