• Tue. Apr 16th, 2024

Bitwise CIO Foresees A Trillion-Dollar Influx In Bitcoin

Steve Kornacki

BySteve Kornacki

Mar 29, 2024
Bitwise CIO Foresees Trillion-Dollar Influx In Bitcoin Via ETFs

Matt Hougan Anticipates Trillion-Dollar Influx

Bitwise Chief Investment Officer (CIO) Matt Hougan has forecasted an over $1 trillion influx into Bitcoin through Exchange-Traded Funds (ETFs) within the next twelve months. His prediction is based on the premise that global wealth managers will allocate an average of 1% of their assets to Bitcoin, marking a transformative shift in institutional investment into the digital asset.

Hougan’s assertion was articulated in Bitwise’s weekly investor note, where he provided insights into the current challenges and opportunities for investors in the rapidly evolving digital currency landscape. Despite the ongoing volatility plaguing the crypto markets, particularly evident in BTC’s price swings between $60,000 and $70,000, Hougan maintains a bullish stance on the long-term prospects of the leading cryptocurrency.

Hougan explained that the BTC market is currently in a “short-term holding pattern,” awaiting several significant events to shape its trajectory in the coming months. Such events include the eagerly anticipated Bitcoin halving and approvals of spot Bitcoin ETFs for major national platforms such as Wells Fargo or Morgan Stanley.

Optimistic Projections

Despite short-term uncertainties, Hougan remains optimistic, citing the successful launch of spot Bitcoin ETFs as a pivotal moment in enhancing accessibility to the crypto market for institutional investors. With over $100 trillion under management by asset managers globally, the potential for a fractional allocation to Bitcoin could catalyze a massive capital inflow, dwarfing current investment levels.

Referencing the historic $12 billion that flowed into ETFs since their inception, Hougan’s projection emphasizes the nascent stage of crypto adoption and the immense room for growth.

Bitwise Files Application For Spot Ethereum ETF With SEC

Meanwhile, Bitwise has officially submitted its application for a spot Ethereum ETF with the US Securities and Exchange Commission (SEC). The filing, marked by an S-1 form, outlines Bitwise’s plan to introduce the Bitwise Ethereum ETF, providing investors with exposure to investments in ETH through its trust.

The SEC is expected to rule on various ETF applications by May 23rd. Bitwise’s application includes its intention to list the ETF on the NYSE Arca exchange, with Coinbase Custody designated as the fund’s custodian.

However, other details, such as the ticker symbol and associated fees, were notably absent from the submission. While Bitwise’s proposal discusses Ethereum staking as an integral aspect of the trust, it does not delve into the potential for the fund to engage in staking activities to generate returns, distinguishing it from competing applications from Ark 21Shares and Fidelity.

NYSE Arca Joins the Fray

Moreover, NYSE Arca has filed a 19b-4 proposal seeking a rule change to facilitate the listing of Bitwise’s spot Ethereum ETF. Bitwise’s contribution to the filing includes an analysis highlighting a “strong correlation” between the ETH spot market and the CME ETH futures market.

This analysis mirrors the arguments in securing approval for spot Bitcoin ETFs, addressing the SEC concerns regarding market manipulation. Nevertheless, industry analysts caution against overly optimistic expectations regarding spot Ethereum ETF approval.

Bloomberg analyst Eric Balchunas recently opined that spot Ethereum ETFs have a 35% chance of approval by May 23rd. Eric cited a lack of indicators from the SEC similar to those preceding spot Bitcoin ETF approvals.

The SEC is set to deliberate on an Ethereum ETF application from VanEck by May 23rd. At least seven other asset managers, besides Bitwise, have pending applications awaiting regulatory approval.

Steve Kornacki

Steve Kornacki

Steve Kornacki, a respected author at Big Trends Signals, uses his deep online trading acumen to create comprehensive guides and balanced reviews, empowering traders in their digital pursuits.

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