Advisors Are Pouring Gas on Bitcoin’s Rally: Bitwise CIO

Bitwise’s Matt Hougan explains why financial advisors are accelerating Bitcoin’s rally

By: André Beganski

February 27, 2024

A new suite of suit-wearing crypto investors in the U.S. is about to invade.

As spot Bitcoin ETFs push past $6 billion in total net inflows after one month, some retail investors and financial institutions may already be knee-deep in the coin. But, according to Bitwise CIO Matt Hougan, a reflexive rally in Bitcoin’s price could be afoot as financial advisors gain access to the class of newly-listed products.

“Part of the reacceleration we're seeing … is from those [advisor] platform approvals and those advisors making their allocations,” he said of spot Bitcoin ETFs inflows. “If prices continue to stay here, or even go higher, that's going to build on itself for a while.”

Last week, Carson Group, a registered investment advisory (RIA) with $30 billion on its platform, approved four spot Bitcoin ETFs, including Bitwise’s product. As more financial firms look to pitch clients on Bitcoin investments or allocate a portion of their portfolios to the crypto, Hougan said Bitcoin’s investor base will grow rapidly. 

“This advisor space that we're just unlocking with things like this Carson group approval is two times the size of the investor base that took Bitcoin from 0 to $50,000,” he said. “Once you see these people invest — and they're going to invest 1% to 3% of their portfolio — … There's not going to be enough bitcoin.”

Outpacing a majority of spot Bitcoin ETFs that were listed in January, the Bitwise Bitcoin ETF is one of four offerings that has attracted over $1 billion of inflows. Ranked among financial giants like Fidelity and BlackRock, Hougan attributed the product’s early success to Bitwise’s comparatively low management fee for its product and crypto-native appeal.

“We've really aligned ourselves with the Bitcoin community,” he said. “We're the only ETF that publishes our Bitcoin address, so you can check for yourself that we own the Bitcoin … We [also] donate 10% of the gross profits of the ETF back to Bitcoin Core developers.”

On Monday, spot Bitcoin ETFs saw $514 million in net inflows, according to data from CoinShares. And a lion’s share of funds flowed into The Fidelity Wise Origin Bitcoin Fund, which totaled $243 million. Representing the ETF’s second-best day of daily net inflows, CoinShares’ Head of Research, James Butterfill, attributed the spike to advisors.

“Carson Group has just greenlighted Bitcoin ETFs, which is likely keeping demand high,” he wrote in a comment on X. “The RIA market needs a certain number of months before they are allowed to trade newly listed instruments.” 

Meanwhile, the price of Bitcoin had surged past $56,000 on Tuesday — trading hands at its highest price since December of 2021, according to CoinMarketCap. Typically, it can take months for an advisory to review newly-listed products, Hougan said. But the focus on vetting spot-Bitcoin ETFs intensifies as Bitcoin rises, he said, producing some reflexivity.

“If it was on your docket to review these ETFs — decide if you want to allocate, investigate the custodians and how they trade — you might have planned to take three months,” Hougan explained. “But as you see Bitcoin recover from the [post-ETF] dip and start to move towards new all-time highs, you're accelerated in doing that. You feel the pressure.”


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