According to insights from Bitwise, a leading crypto asset manager, Bitcoin ETFs are poised for significant growth in the coming months. The Chief Investment Officer, Matt Hougan, anticipates a surge in demand for spot bitcoin ETFs, driven by various market participants.
This surge is expected to include participation from larger U.S. wirehouses, which could further amplify the momentum. With Bitcoin ETFs being likened to the “IPO” of BTC, this impending wave indicates a potential shift in the cryptocurrency landscape.
Bitwise predicts a massive surge in Bitcoin ETFs
With the trading volume and inflows reaching all-time highs this week, the ten spot bitcoin ETFs have arguably had one of the most successful launches in history. However, Bitwise Chief Investment Officer Matt Hougan anticipates that demand will continue to rise.
According to Hougan’s interview with CNBC on Thursday, the primary purchasers of the ETFs, including the BITB of his own company, have been retail investors, hedge funds, and independent financial advisors.
“I think there’s an even bigger wave coming in a few months as the major wirehouses come on,” he predicted. None of the largest wirehouses in the United States, including Bank of America, Wells Fargo, Goldman Sachs, and JPMorgan, have made the funds available to consumers as of yet.
Hougan predicted the arrival of the next surge of institutional capital and referred to the ETFs as the “IPO moment” for Bitcoin.
Wednesday saw the bitcoin ETFs surpass their daily volume record with approximately $7.7 billion in trading activity, up from the previous day’s record of $4.7 billion.
The roughly $3.3 billion in volume of BlackRock’s iShares Bitcoin ETF (IBIT) was more than double the previous record of $1.35 billion. Additionally, the fund currently maintains an AUM of over $9 billion, placing it at the top of the AUM rankings for new funds (previously a closed-end fund known as ex-GBTC prior to its conversion to an ETF).
Following IBIT, Fidelity’s FBTC has amassed more than $6 billion in AUM, with ARK/21Shares’ BITB and Bitwise’s BITB being the only other two funds with over $1 billion in AUM.
Bitcoin ETFs market performance
According to Hougan, the BTC ETFs have inaugurated a “new era of price discovery.” Hougan stated that the supply-and-demand dynamic regarding the quantity of Bitcoin ETFs purchased in comparison to the daily Bitcoin mined and the forthcoming halving event is “completely off the hook.”
“There’ll be some consolidation,” predicted Hougan, who projects that six to eight ETFs will endure over the long term.
When asked about its potential value, Hougan stated that BTC could significantly surpass Bitwise’s initial estimate of $80,000 in 2024, potentially ascending to a range of $100,000 to $200,000 or even more.
Bitwise Bitcoin ETF (BITB) inflows rank fourth among spot Bitcoin ETFs since their inception seven weeks ago, at $1.11 billion, according to BitMEX Research. February 28 saw inflows of $676.8 million, which is a record high for the ecosystem.
BlackRock Brazil with another ETF
With the introduction of a new BTC BDR (Brazilian Depositary Receipts) ETF, the iShares spot Bitcoin exchange-traded fund from BlackRock will be accessible in Brazil. March 1 will mark the beginning of trading, the largest asset manager in the world announced on February 29.
The Brazilian financial market infrastructure provider B3 will collaborate with BlackRock to offer the new product, according to BlackRock Brazil president Karina Saade at the organization’s main office in São Paulo. Saade asserted, “The launch of the iShares Bitcoin Trust ETF BDR, IBIT39, advances the innovation of ETFs and allows access to bitcoin for investors through a security — the ETF BDR — that can be incorporated […] into their portfolios.”
BDRs of foreign ETFs are Brazilian-issued securities that are collateralized by shares of foreign ETFs. Thus, the Brazilian ETF is essentially identical to the Bitcoin ETF that BlackRock introduced in January in the United States. Its performance will be comparable to that of the U.S. ETF.
It will incur an administrative fee of 0.25%, which will be compensated by a one-year exemption on the initial $5 billion of assets under management (AUM). There is a complete tax on BDRs.
Prior to investing in the Brazilian fund, investors must have accumulated a minimum of one million reals ($201,000) in market capital. Retail sales approval is still pending for BlackRock Brazil.
