Bitcoin ETF Inflows Could Eclipse $1 Trillion, Predicts Bitwise CIO
March 28 2024 - 4:45AM
NEWSBTC
Following a week of net outflows, the spot Bitcoin ETF market has
rebounded with impressive net inflows this week, highlighting a
growing investor confidence in Bitcoin and its associated financial
products. This week’s market activities have shown a remarkable
reversal from the previous 5-day net outflow streak, with Tuesday
witnessing a substantial net inflow of $480 million, followed by
$243.5 million on Wednesday. Yesterday’s resurgence in investor
interest was notably boosted by Blackrock’s massive inflow of
$323.8 million, effectively offsetting Grayscale GBTC’s $299.8
million outflows. Moreover, Ark Invest’s ARKB reported its best day
yet, with $200 million in inflows, despite Fidelity experiencing
its worst day with a mere $1.5 million in outflows. Nevertheless,
Fidelity managed to bounce back with significant inflows of $261
million and $279 million on Monday and Tuesday, respectively.
Yesterday's ETF flows were positive for $243.5 million. Blackrock
finally woke up again for $323.8 million completely cancelling out
$GBTC's $299.8 million outflows. Ark had their best day yet with
$200 million. Fidelity had its worst day with $1.5 million. Price
dumped on… pic.twitter.com/LLChkITN7q — WhalePanda (@WhalePanda)
March 28, 2024 1% Down, 99% To Go For Bitcoin ETFs However,
according to Bitwise Chief Investment Officer (CIO) Matt Hougan,
this is just the mere beginning of what is to come in the upcoming
months. Hougan’s commentary, part of his weekly memo to investment
professionals, sheds light on the current market dynamics and the
colossal potential that lies ahead. “1% Down; 99% to Go,” Hougan
wrote, highlighting the nascent yet promising journey of Bitcoin
ETFs. Related Reading: $9.5 Billion In Bitcoin Options Poised To
Expire This Friday: Market Turbulence Ahead? Lately, the market has
been characterized by its volatility, with Bitcoin’s price
oscillating between $60,000 and $70,000. Hougan advises a calm and
long-term perspective amidst this fluctuation, especially as the
sector anticipates the upcoming Bitcoin halving around April 20,
the approval of Bitcoin ETFs on national account platforms, and the
soon-to-come completion of due diligence by various investment
committees. Despite the current sideways movement of Bitcoin’s
price, Hougan remains bullish about its long-term trajectory.
“Bitcoin is in a raging bull market,” he asserts, noting a nearly
300% increase over the past 15 months. The launch of spot Bitcoin
ETFs in January has marked a significant milestone, opening up the
Bitcoin market to investment professionals on an unprecedented
scale. Hougan’s analysis points to a profound shift as global
wealth managers, who collectively control over $100 trillion, begin
to explore investments in the “digital gold.” He suggests that even
a conservative allocation of 1% of their portfolios to Bitcoin
could result in approximately $1 trillion of inflows into the
space. Related Reading: Bitcoin “Liquid Inventory Ratio” Hits
All-Time Low, What It Means This perspective is backed by
historical data showing that even a 2.5% allocation to Bitcoin has
enhanced the risk-adjusted returns of traditional 60/40 portfolios
in every three-year period of Bitcoin’s history. The recent inflows
into Bitcoin ETFs, though impressive, are seen by Hougan as merely
the beginning of a much larger movement. “We are all excited about
the $12 billion that has flowed into ETFs since January. And it is
exciting: Collectively, the most successful ETF launch of all
time..But imagine global wealth managers allocate just 1% of their
portfolios to bitcoin on average,” Hougan elaborates, emphasizing
the scale of potential growth awaiting the cryptocurrency market.
He concludes: Think about the implications. […] A 1% allocation
across the board would mean ~$1 trillion of inflows into the space.
Against this, $12 billion is barely a down payment. 1% down, 99% to
go. At press time, BTC traded at $70,644. Featured image created
with DALL·E, chart from TradingView.com
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