Matthew Hougan, the Chief Investment Officer of Bitwise, foresees a potential influx of up to $1 trillion into Bitcoin via exchange-traded funds (ETFs) as institutional investors progressively enter the cryptocurrency market.
In a memo circulated to investment professionals, Hougan addressed concerns regarding Bitcoin’s price volatility, advocating for a patient long-term perspective amidst fluctuations between $60,000 and $70,000. He highlighted upcoming events such as the Bitcoin halving and potential approval of spot Bitcoin ETFs by major financial platforms like Morgan Stanley or Wells Fargo.
Emphasizing the importance of thorough due diligence by investment committees and consultants, Hougan acknowledged the likelihood of sideways price movements in response to minor shifts in sentiment. Nevertheless, he expressed optimism about Bitcoin’s trajectory, citing a robust bull market with substantial growth over the past 15 months and compelling reasons for further expansion.
Hougan noted the significant impact of January’s approval of spot Bitcoin ETFs, which opened up the cryptocurrency market to investment professionals. He envisioned a gradual process of interest from wealth managers managing trillions of dollars, potentially leading to substantial inflows.
Reflecting on the success of ETF launches, Hougan suggested that even a modest allocation of 1% of global wealth manager portfolios to Bitcoin could result in a significant $1 trillion influx, dwarfing the initial $12 billion.
Regarding the potential launch of spot Ethereum ETFs, Hougan proposed a cautious approach, suggesting a December debut could be more beneficial. This delay would afford Wall Street and traditional finance sectors additional time to comprehend the intricacies of cryptocurrency, particularly Bitcoin.
Hougan estimated an eight to nine-month adjustment period for Wall Street before considering the introduction of another ETF.