Bitwise CIO Predicts $55 Billion in Inflows for Bitcoin ETFs in First 5 Years

During a panel discussion at the 4th Annual ETFGI Global ETFs Insights Summit on October 4, Matthew Hougan, Chief Investment Officer of Bitwise Asset Management, forecasted that US-listed spot Bitcoin Exchange-Traded Funds (ETFs) will attract net inflows of $55 billion in the next five years once they are launched. Hougan based his prediction on the flow of funds he has observed into Bitcoin ETFs that are listed in other markets.

‍

Bitwise Asset Management, along with other firms such as ARK Investment Management and BlackRock has submitted filings to the Securities and Exchange Commission (SEC) to offer spot Bitcoin ETFs. The SEC has approved Bitcoin futures ETFs, but it has not yet authorized a spot Bitcoin ETF.

‍

Hougan tempered expectations about the amount of funds the Bitcoin ETFs are likely to attract in the near term, stating that while he has seen optimism online with predictions suggesting Bitcoin ETFs will reel in $10-$30 billion in its first year, the history of ETFs does not support this optimism. He referred to past instances where novel ETFs, such as the SPDR Gold Shares by State Street Global Advisors, attracted $3 billion in its first year, but took five to seven years to hit its stride.

‍

Hougan believes that a Bitcoin ETF could transform the way the Bitcoin is perceived by everyday financial advisors and institutions, similar to how the gold ETFs changed the perception of gold from being a physical commodity stored under mattresses to an asset class. 

‍

ARK Investment crypto lead, Yassine Elmandjra, suggested that investors are more likely to invest in Bitcoin ETFs hosted by managers that have shown long-standing interest and expertise in the space, rather than those that appear to be trying to capitalize on current trends. Hougan agreed with this sentiment, albeit being aware of the specialized nature of the market and the need for a deep understanding of it. 

‍

Finally, Anna Paglia, global head of ETFs at Invesco, highlighted the strength and experience of leading ETF providers, suggesting their resources and skills can help clients achieve their investment goals. The strength and infrastructure of leading ETF providers, in her view, also make them a successful choice for those looking to invest in the field.