- Bitwise CIO Matt Hougan has responded to recent arguments against the success of Bitcoin ETFs.
- Citing available data, Hougan argued that investment advisors have adopted Bitcoin ETFs faster than any other ETF.
- The contention comes amid market uncertainty in recent months.
Launched in January 2024, spot Bitcoin ETFs have largely been hailed as successful. They have raked in billions of dollars in investments, which many believe played a vital role in the parabolic run experienced by the broader crypto market in Q1 2024.
However, due to uncertain market conditions, the success of these products has come under scrutiny, eliciting a response from Bitwise CIO Matt Hougan.
Bitwise’s Hougan Counters Slow Bitcoin ETF Adoption Narrative
“Jim is wrong here: Investment advisors are adopting bitcoin ETFs faster than any new ETF in history,” Bitwise’s Matt Hougan asserted in an X post on Monday, September 9.
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The statement came in response to a thread by investment researcher Jim Bianco. In the thread, Bianco asserted that ETFs had yet to start driving Bitcoin adoption, pointing to the dominance of retail investors and “small” contributions from investment advisors, which he highlighted made up less than 10% of assets under management on these funds.
Looking at the same data, however, Hougan came off with a different view.
The Bitwise CIO highlighted that, according to Bianco’s data focused on BlackRock’s IBIT product, investment advisors had contributed $1.45 billion to the product. According to Hougan, Bianco only termed this as small because it represented a small fraction of the total $46 billion that has flowed into Bitcoin ETFs.
Still, Hougan noted that excluding all other flows, the $1.45 billion brought in by investment advisors would still make IBIT the second fastest-growing ETF to launch this year, excluding all other Bitcoin ETFs.
“The truth is that investment advisors are adopting bitcoin ETFs faster than any other ETF in history. It is just that their historic flows are overshadowed by the even-more-historic purchases of other investors.
It is accurate to say that investment managers represent a small fraction of buyers of bitcoin ETFs. But it is not accurate to say that investment manager purchases of bitcoin ETFs are ‘small.'” Hougan stressed.
The contentions over the success of Bitcoin ETFs come as recent subdued crypto market conditions have left investors scrambling for answers.
Tough Winds to Read
In recent weeks, Bitcoin’s price has seen lots of sideways price movements punctuated by deep corrections. The topsy-turvy price movement comes as the asset has been highly sensitive to increasingly complicated macroeconomic developments.
While the U.S. looks finally set to cut interest rates, which has long been tipped as bullish, experts have warned that the potential of the yen carry trade unwinding could throw a wrench in any plans to celebrate.
The yen carry trade refers to a decades-long strategy in which traders borrow yen at low interest rates to invest in high-yielding assets, usually in other currencies. Over the past few weeks, however, the continued profitability of this strategy has come under question.
The Bank of Japan (BoJ) has expressed willingness to raise rates for the first time in two decades, sparking concerns that several investors racing to avoid being caught on the wrong side of the trade would be forced to pull funds from risk markets to repay yen loans.
On the Flipside
- Regardless of the source of the flows, spot Bitcoin ETFs remain one of the most successful ETF launches in history.
- Despite Bitcoin’s recent price struggles, the asset is still up 35% year-to-date (YTD).
Why This Matters
ETFs have been the dominant crypto narrative in 2024 amid the potential to onboard millions of institutional investors. The perceived success of Bitcoin products has only helped to solidify the narrative.
Read this for more on Bitcoin ETFs:
Bitcoin ETFs Extend Outflow Streak with $169.7M as BTC Trades Below $55K
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