At the Exchange ETF conference in Miami Beach, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, and Ric Edelman, founder of the Digital Assets Council of Financial Professionals, discussed discussion with CNBC’s Bob Pisani on the future of spot Bitcoin ETFs and their integration within diversified portfolios.
$150 billion ready to enter the Bitcoin rabbit hole
Ric Edelman has made a bold prediction about future inflows into spot Bitcoin ETFs, projecting an unprecedented $150 billion by the end of 2025, up from the current $5 billion. He said confidently: “I expect that by the end of 2025, two years from now, we will see total inflows of over $150 billion. We are currently only at $5 billion.” This represents a significant leap, signaling a transformative phase in cryptocurrency investing.
The conversation then turned to the underlying factors expected to cause this increase. Edelman elaborated on the potential influx of independent financial advisors, who currently manage about $8 trillion in assets. With three-quarters indicating they are willing to allocate to Bitcoin ETFs, Edelman explains the math, according to recent industry studies: “Do the arithmetic. $8 trillion, 77% and 2.5% is $150 billion in flows.”
Notably, this calculation only takes into account independent advisors, leaving out the substantial potential of wirehouses, regional broker-dealers and institutional investors, as Edelman highlighted. On a bullish note, Matt Hougan highlighted the sustainable nature of investments in Bitcoin ETFs by financial advisors, contrasting with the speculative short-term trading often associated with cryptocurrencies.
“The people who are buying Bitcoin ETFs now, the financial advisors, they are making their investments for the long term. Financial advisors are generally not short-term traders; they are not speculating where Bitcoin will be next week. They make an allocation that they hold for 1 year, 3 or 5 years,” Hougan noted.
Independent advisors manage $8 trillion in assets, and surveys show that 77% of them want to add Bitcoin to their portfolios, aiming for an average allocation of 2-3%.
This means we’ll likely see $150 billion flow into Bitcoin ETFs from advisors alone.
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BTC price can reach $150,000
Delving into who is leading the charge in Bitcoin ETF investing, Hougan noted, “We’re seeing a lot of flows from RIAs, we’re seeing from family offices, and we’re seeing some people moving away from other products.” This trend points to broader acceptance and recognition of Bitcoin ETFs within the investment community.
Edelman further strengthened its $150 billion inflow projection with the expected impact on Bitcoin’s price, suggesting it could reach $150,000 within two years due to steady supply and increasing demand dynamics. “This number excludes inflows from wirehouses, regional broker-dealers and institutional investors,” he added, underscoring the conservative nature of his estimate.
Hougan supplemented the discussion by shedding light on the broader implications for the ETF and crypto markets, praising the regulated, efficient and investor-friendly nature of Bitcoin ETFs. He noted: “ETFs track prices well, investors have peace of mind with access to all data and ETFs are simple and secure with low fees.”
Both experts agreed on the strategic value of including spot Bitcoin ETFs in investment portfolios for diversification. Hougan summed up this sentiment by saying, “They see Bitcoin as an uncorrelated asset that, when used for rebalancing and professionally managed, will not lead to any volatility for the portfolio.”
Reflecting on the relative success of Bitcoin ETFs versus traditional gold ETFs, Hougan highlighted the competitive fee structure and strong demand seen for the Bitwise Bitcoin ETF (NYSE:BITB). “Because Bitwise charges 20 basis points, its fees are half that of the largest gold ETF,” he noted, underscoring the financial efficiency and appeal of Bitcoin ETFs to a wide range of investors.
At the time of writing, BTC was trading at $51,808.
Featured image created with DALL·E, chart from TradingView.com
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