Hidden Demand For Bitcoin ETFs: Bitwise
Demand for Bitcoin ETFs is on the rise, with some of the marketโs biggest players yet to enter the space, according to Bitwise, a crypto asset manager. Matt Hougan, the CIO of Bitwise, recently shared a post on social media outlining the different investor groups that have already invested in Bitcoin ETFs and those that are expected to do so soon.
- Investors who have already bought Bitcoin ETFs include retail investors, registered investment advisors, family offices, hedge funds, venture capital funds, and asset managers.
- Investors who are expected to buy Bitcoin ETFs in the near future include wirehouse advisors, corporations, and institutional consultants.
A wirehouse is a full-service broker-dealer that provides various financial services such as investment banking, trading, research, and wealth management. Examples of large U.S. wirehouses include Morgan Stanley, Merrill Lynch, and UBS.
While retail buyers have been a significant source of initial demand for Bitcoin ETFs, there is still untapped potential among larger investor groups:
- Wirehouse advisors from major firms are yet to fully embrace Bitcoin ETFs.
- Corporations have not yet entered the market on a large scale.
- Institutional consultants are also expected to join the trend in the near future.
The Potential of Corporate Buyers
MicroStrategy currently holds the title for being the largest corporate owner of BTC. As of March 2024, the company owns 193,000 coins and recently announced a $600 million convertible note offering to raise additional funds for purchasing more Bitcoin.
Other potential buyers that Bitwise envisions for Bitcoin ETFs include:
- Endowments
- Pension funds
- Sovereigns
- Supernationals
El Salvador, the only country that has publicly confirmed holding BTC in its Treasury, serves as a prime example of a sovereign embracing Bitcoin.
Pressure on Wirehouse Platforms
According to Bloomberg ETF analyst Eric Balchunas, there is mounting pressure on wirehouse platforms to offer Bitcoin ETFs to their clients. While these platforms typically prefer to see a track record and financial incentives before adopting new products, the grassroots demand for Bitcoin ETFs may force them to expedite their entry into the market.
Hot Take: Corporations Yet to Fully Embrace Bitcoin ETFs
The demand for Bitcoin ETFs is just beginning to gain momentum, with significant potential for growth among various investor groups. Despite the initial success of Bitcoin ETFs among retail buyers and other investor categories, there are still major players in the market who have yet to fully embrace this investment option. This includes wirehouse advisors from prominent firms, corporations looking to diversify their portfolios, and institutional consultants seeking exposure to digital assets.
The entrance of these untapped investor groups into the Bitcoin ETF market could lead to further growth and adoption. As more corporations and institutions recognize the value of cryptocurrencies like Bitcoin, they may allocate a portion of their investment portfolios towards digital assets. This trend has already been observed with companies like MicroStrategy accumulating significant amounts of BTC.
In conclusion, while retail investors have been active participants in the Bitcoin ETF space, there is hidden demand from larger players who are expected to enter the market soon. This untapped potential represents an opportunity for further growth and development in the cryptocurrency industry.
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