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, participated in a bitcoin-etfs.html” target=”_blank” rel=”nofollow”>discussion with CNBC's Bob Pisani on the future of spot bitcoin ETFs and their integration into diversified portfolios.
$150 Billion Ready to Enter the bitcoin Rabbit Hole
Ric Edelman made a bold prediction about future bitcoin spot ETF inflows, predicting a record $150 billion by the end of 2025, up from $5 billion today. He said confidently: “I predict that by the time we get to the end of 2025, we're talking about two years, we will see total inflows of over $150 billion. Right now we are 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 drive this increase. Edelman referred to potential capital inflows from independent financial advisors, who currently manage about $8 trillion in assets. According to recent industry studies, three-quarters of them indicate they are willing to make investments in bitcoin ETFs, and Edelman explained the calculations: “Let's do the arithmetic. “8 trillion dollars, 77% and 2.5% are flows worth 150 billion dollars.”
Notably, this calculation only takes into account independent advisors, leaving out the substantial potential of wirehouses, regional broker-dealers, and institutional investors, as Edelman emphasized. On a bullish note, Matt Hougan highlighted the long-term nature of bitcoin ETF investments by financial advisors, in contrast to the short-term speculative trading often associated with cryptocurrencies.
“The people who buy bitcoin ETFs now, the financial advisors, make their allocations for the long term. Financial advisors are not typically short-term traders, they do not speculate where bitcoin will be next week. They make an assignment that they keep for 1 year, 3 or 5 years.Hougan commented.
Independent advisors control $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 will likely see $150 billion flowing into bitcoin ETFs from advisors alone.
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btc price could reach $150,000
Delving into who is leading investments in bitcoin ETFs, Hougan noted: “We're seeing a lot of flows from RIAs, from family offices, and from some people leaving other products.” This trend points to increasing acceptance and recognition of bitcoin ETFs within the investment community.
Edelman further reinforced his $150 billion inflow projection with the expected impact on bitcoin price, suggesting it could reach $150,000 within two years due to fixed supply and increasing demand dynamics. “This figure excludes inflows from cable houses, regional brokerages and institutional investors,” he added, highlighting the conservative nature of his estimate.
Hougan complemented the discussion by shedding light on the broader implications for ETFs 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 bitcoin spot ETFs in investment portfolios for diversification. Hougan summed up this sentiment by saying: “They view bitcoin as an uncorrelated asset that, when used for rebalancing and professionally managed, will not generate any portfolio volatility.”
Reflecting on the comparative 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). “With Bitwise charging 20 basis points, fees are half those 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 publication, btc was trading at $51,808.
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