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Bitwise chief investment officer Matthew Hougan said institutional investors would likely pour as much as $1 trillion into Bitcoin through exchange-traded funds (ETFs) as they steadily move into crypto.
In a memo sent to investment experts, Hougan addressed concerns over Bitcoin’s price volatility. As the asset fluctuates between $60k and $70k, the CEO believes the best strategy is to “keep calm and take the long view.”
1% Down; 99% to Go. Reflections on the ETF launch.
An excerpt from Bitwise CIO @Matt_Hougan's weekly memo to investment professionals.
Lately the crypto markets have been volatile, with bitcoin bouncing between $60,000 and $70,000. The media gets breathlessly worried about…
Despite the short-term fluctuations, Hougan highlighted several key forthcoming events. These include the Bitcoin halving and potential approval of spot Bitcoin ETFs by major platforms like Morgan Stanley or Wells Fargo.
Hougan emphasized the ongoing due diligence processes by investment committees and consultants as a crucial step before committing to Bitcoin investments.
He mentioned that while waiting for these developments, Bitcoin’s price might experience sideways movement in response to minor sentiment shifts. Nonetheless, Hougan is optimistic about Bitcoin’s future, citing a robust bull market with a nearly 300% increase over the past 15 months and strong reasons for continued growth.
The January approval of spot Bitcoin ETFs significantly opened the crypto market to investment professionals. Hougan believes this marks the beginning of interest from professionals managing trillions of dollars, a process that will take years.
He also highlighted the $12 billion influx into ETFs since their launch, calling it the most successful ETF debut. Yet, he anticipates that global wealth managers allocating just 1% of their portfolios to Bitcoin could lead to $1 trillion in inflows, making the initial $12 billion seem minimal.
Earlier in March, Hougan suggested that spot Ethereum ETFs could attract more assets if launched after May.
Given a more cautious outlook for a May debut, he proposed a December launch could be more beneficial. The delay would give Wall Street and traditional finance sectors more time to understand the complexities of cryptocurrency, especially Bitcoin.
Hougan estimated an eight to nine-month period is needed for Wall Street to adjust to Bitcoin before considering another ETF.
