Institutions with significant assets are preparing to invest in spot Bitcoin exchange-traded funds (ETFs) by the end of June, according to Bitwise, a crypto-native asset manager. In a memo sent to investors on March 9, Bitwise’s chief investment officer, Matt Hougan, stated that the company is engaged in “serious due diligence” discussions with large corporations, major wirehouses, and institutional consultants who are looking to increase their exposure to Bitcoin in the coming months. Bitwise has already confirmed that a wide range of individual retail investors, family offices, hedge funds, and venture capital firms are also interested in acquiring more allocation into spot Bitcoin ETFs.
Hougan emphasized the importance of not only the current buyers but also the future buyers of Bitcoin ETFs. Analysts have credited the strong institutional demand for Bitcoin ETFs as the driving force behind Bitcoin’s price surge of over 50% since their launch on January 11, from $45,603 to $68,583 at the time of publication. While Bitcoin ETFs have already attracted nearly $9 billion in net inflows since their launch, Hougan expects the inflows into the 10 approved spot Bitcoin ETF products to further accelerate in the second half of the year. He described these potential investors as representing massive categories with trillions of dollars in assets.
Hougan has previously expressed his optimism for Bitcoin ETFs, stating on February 29 that he expects a larger wave of institutional capital to flow into the products, which would significantly drive up Bitcoin’s price. According to data from BitMEX Research, Bitcoin ETFs have attracted net inflows of $8.89 billion since their inception, with BlackRock’s iShares IBIT fund leading in terms of new inflows.
Eric Balchunas, an ETF analyst at Bloomberg, described the inflow numbers as “bananas” for ETFs that are less than two months old in a post published on March 5. On March 8, BlackRock’s Bitcoin ETF surpassed MicroStrategy in terms of total Bitcoin held, with 197,943 BTC on its balance sheet, worth over $13.5 billion at current prices.