Bitcoin ETF Inflows Could Eclipse $1 Trillion, Predicts Bitwise CIO

After a week of Bitcoin ETF investors taking their money out, there has been a notable surge in new investments this week. This trend suggests that faith in Bitcoin and its related financial instruments is increasing. The past five days saw a significant drain of funds from the market, but on Tuesday alone, $480 million was added, with another $243.5 million following suit on Wednesday.

Yesterday saw a surge in investor activity, significantly fueled by Blackrock’s large investment of $323.8 million. This inflow helped counteract the $299.8 million outflows from Grayscale GBTC. Additionally, Ark Invest’s ARKB reported an impressive day with $200 million in new investments, even as Fidelity experienced a poor day with only $1.5 million in withdrawals. However, Fidelity quickly recovered with substantial inflows of $261 million on Monday and $279 million on Tuesday.

Yesterday’s ETF flows were positive for $243.5 million.

Blackrock made a significant investment of $323.8 million, offsetting the $299.8 million in outflows from Grayscale Bitcoin Trust.

Ark had their best day yet with $200 million. Fidelity had its worst day with $1.5 million.

Price dumped on…

— WhalePanda (@WhalePanda) March 28, 2024

1% Down, 99% To Go For Bitcoin ETFs

According to Bitwise Chief Investment Officer Matt Hougan, we’re only seeing the start of things in the upcoming months for Bitcoin ETFs. Hougan’s memo to investment professionals provides insight into the present market situation and the significant potential that lies ahead, which he refers to as “1% Down; 99% to Go.”

Recently, the market has shown significant instability with Bitcoin’s value bouncing between $60,000 and $70,000. Despite this price swing, Hougan recommends keeping a cool head and taking a patient approach during these fluctuations. This advice comes as the industry prepares for several key events: the upcoming Bitcoin halving in April 2021, potential approval of Bitcoin ETFs on various platforms, and ongoing evaluations by investment committees.

In contrast to Bitcoin’s present price instability, Hougan maintains optimism about its future growth. He strongly believes that Bitcoin is experiencing a robust bull market, as evidenced by a nearly 300% surge over the past fifteen months. The introduction of spot Bitcoin ETFs in January represents a major achievement, providing institutional investors with an unprecedented opportunity to invest in Bitcoin.

According to Hougan’s assessment, we are witnessing a significant change as wealth managers managing more than $100 tr collectively ponder investing in “digital gold.” This shift could potentially bring about a sizable injection of around $1 trillion into the sector if only 1% of their portfolios were allocated to Bitcoin.

From a historical standpoint, adding as little as 2.5% of Bitcoin to a conventional 60/40 investment portfolio has boosted the risk-adjusted yields in each three-year span throughout Bitcoin’s existence.

In simpler terms, Hougan believes that the $12 billion invested in Bitcoin ETFs since January is just the tip of the iceberg. He encourages us to consider the vast sums that could be poured into bitcoin if wealth managers were to allocate even a small percentage of their portfolios to it.

Consider the consequences. For instance, if every investor allocated just 1% of their assets to this sector, it would result in approximately $1 trillion entering the market. In comparison, the current investment amount stands at a mere $12 billion. That’s only a small beginning; there is still 99% more to be invested.

At press time, BTC traded at $70,644.

Bitcoin ETF Inflows Could Eclipse $1 Trillion, Predicts Bitwise CIO

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2024-03-28 11:46