The imminent entry of major wirehouses into Bitcoin exchange-traded funds (ETF) trading is poised to unleash a substantial influx of institutional capital, according to insights from Bitwise. In a recent CNBC interview on February 29, Bitwise’s CIO, Matt Hougan, noted that the initial surge of interest in Bitcoin ETFs had predominantly originated from retail investors, hedge funds, and independent financial advisors. Hougan anticipates a more substantial wave of institutional capital entering the scene as prominent wirehouses join the fray, describing this development as Bitcoin’s “IPO moment.”
Significantly, reports from Bloomberg on February 29 indicate that two of the largest wirehouses, Bank of America’s Merrill Lynch and Wells Fargo, have initiated the offering of spot Bitcoin ETFs to their wealth clients. However, this option is presently accessible only to clients who explicitly request the products.
Furthermore, Morgan Stanley is reportedly contemplating the inclusion of spot Bitcoin ETFs on its brokerage platform. Hougan contends that Bitcoin ETFs have ushered in a “new era of price discovery,” emphasizing the remarkable supply-demand dynamics. The demand for Bitcoin ETFs has surged, surpassing the daily mined supply of Bitcoin and considering the upcoming halving event, creating an extraordinary market scenario characterized by excessive demand and insufficient supply.
Hougan envisions that the ensuing wave of institutional interest could propel Bitcoin’s price to significantly higher levels. When pressed for a specific figure, he suggested that Bitcoin might exceed Bitwise’s initial 2024 prediction of $80,000, reaching anywhere between $100,000 to $200,000, or possibly even surpassing these estimates.
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BitMEX Research data reveals that the Bitwise Bitcoin ETF (BITB) has attracted the fourth-largest inflows, totaling $1.11 billion, since the launch of spot Bitcoin ETFs seven weeks ago. As of February 28, the inflows surged to $676.8 million, setting a new all-time high for the ecosystem. Leading the pack in terms of inflows are BlackRock’s IBIT and Fidelity’s FBTC, with $7.1 billion and $4.7 billion, respectively.
