Bitcoin ETF Buying Led by Retail, Hedge Funds, FAs; Larger Players Still to Come: Bitwise CIO

Bitwise's chief investment officer, Matt Hougan, predicts increased demand for spot bitcoin ETFs as larger U.S. wirehouses enter the market.


Increased Demand for Spot Bitcoin ETFs

According to Bitwise Chief Investment Officer Matt Hougan, the current demand for spot bitcoin ETFs has predominantly come from retail investors, hedge funds, and independent financial advisors. However, he expects even more demand in the future as larger U.S. wirehouses begin participating.

Bitwise's Bitcoin Fund (BITB), along with three other spot bitcoin ETFs, has surpassed $1 billion in assets under management since its launch. The ten spot bitcoin ETFs have experienced a highly successful launch, with trading volume and inflows hitting new highs this week.

Hougan believes that the major wirehouses, such as Bank of America, Wells Fargo, Goldman Sachs, and JPMorgan, will enter the market in a few months, further driving demand for the ETFs.

Record Volume for Bitcoin ETFs

On Wednesday, the bitcoin ETFs broke their daily volume record with approximately $7.7 billion in trading. This surpassed the previous record of $4.7 billion, which was set the day before.

BlackRock's iShares Bitcoin ETF (IBIT) led the pack with nearly $3.3 billion in volume, more than double the previous record. IBIT now has over $9 billion in assets under management, making it the top fund in terms of AUM (excluding GBTC, which was a closed-end fund before its ETF conversion).

Fidelity's FBTC has accumulated over $6 billion in AUM, while ARK/21Shares' ARKB and Bitwise's BITB are the only other funds with more than $1 billion in AUM.

Consolidation Expected in the ETF Market

Hougan anticipates consolidation in the bitcoin ETF market, with six to eight funds surviving long term. As larger wirehouses enter the market and competition increases, some funds may not be able to sustain their operations.

The outlook for spot bitcoin ETFs remains positive, with increased demand expected from larger institutional players. This growing interest in cryptocurrency ETFs indicates a broader acceptance of digital assets in traditional finance.