Key Points
- Major wirehouses could soon offer Bitcoin ETF trades, leading to a larger wave of institutional capital, says Bitwise's CIO.
- Bank of America's Merrill Lynch and Wells Fargo have reportedly started offering spot Bitcoin ETFs to wealth clients.
Bitwise's CIO, Matt Hougan, has suggested that a significant influx of institutional capital could be on the horizon once major wirehouses begin offering Bitcoin ETF trades.
This comes as the first wave of interest in Bitcoin ETFs has predominantly been driven by retail, hedge funds, and independent financial advisors. Hougan anticipates a second wave of institutional capital in the near future.
Bitcoin ETFs and Major Wirehouses
Reportedly, two of the largest wirehouses, Merrill Lynch from Bank of America and Wells Fargo, have begun offering spot Bitcoin ETFs to their wealthy clients. However, these offerings are currently only available to clients who request them.
Morgan Stanley is also said to be considering the inclusion of spot Bitcoin ETF on its brokerage platform. Hougan stated that the introduction of Bitcoin ETFs has ushered in a new era of price discovery.
Supply and Demand Dynamics
Hougan noted that the supply-demand dynamic is significantly skewed, with the amount of Bitcoin ETFs purchased far exceeding the amount of Bitcoin mined daily. He stated, "There's too much demand and not enough supply."
The next wave of institutional interest could potentially drive Bitcoin's price significantly higher. While it's unclear how high, Hougan indicated that Bitcoin could surpass Bitwise's initial 2024 prediction of $80,000 and potentially reach between $100,000 to $200,000 or even higher.
The Bitwise Bitcoin ETF (BITB) has recorded the fourth largest inflows of $1.11 billion since the launch of spot Bitcoin ETFs seven weeks ago. Inflows reached a new all-time high for the ecosystem on Feb. 28, hitting $676.8 million.
Leading the way in spot Bitcoin ETF flow data are BlackRock's IBIT and Fidelity's FBTC with $7.1 billion and $4.7 billion in flows respectively.
