Bitwise: ETF is the “IPO” of BTC and will enter a new price discovery period

Source: Blockchain Knight

Matt Hougan, chief investment officer of Bitwise, said that with the recent successful approval of ETFs, BTC is expected to open up new areas, and the price of BTC may exceed $80,000 this year. .

The early success of the BTC ETF broke records for its category, triggering continued inflows into BTC since mid-January.

Hougan said that Bitwise launched the BITB spot ETF on January 10 with nine other companies. It has heard that customers are interested in such products for many years and expects a large amount of demand.

Nonetheless, Hougan said given that ETFs typically experience more volatile growth after launch, the continued demand last month was surprising.

He believes that as BTC investment channels expand, more and more institutions will participate in investment, and the demand for BTC will also grow.

Hougan also said: “I would regard the launch of the ETF as the initial public offering of BTC in the US market. The ETF has just unleashed a huge wave of interest from the traditional financial industry, which exceeded my expectations.”< /p>

In fact, by any metric, spot BTC ETFs have historically been successful, but Bitwise has performed particularly well.

In the latest day alone, Bitwise has received approximately US$126.5 million in capital inflows, which is the second largest inflow since its launch, and its assets under management recently exceeded US$1 billion. So far, Bitwise’s assets under management are second only to BlackRock, Fidelity and Ark Invest’s 21Shares.

Hougan believes that although ETFs can now be purchased, not every financial institution can purchase them, and most transactions are conducted by retail investors.

He also explained that institutions such as banks and financial services companies are far from getting in, but that is to be expected as each ETF goes through extensive due diligence by these institutions before being offered to clients. investigation.

Like other assets, the price of BTC is affected by supply and demand, and according to analysts, a "second wave" of demand from institutions is expected to drive prices higher.

In research at the beginning of the year, Bitwise predicted that BTC would trade above $80,000 following spot ETF inflows and an expected supply crunch following BTC’s upcoming halving.

Halving refers to a programming event on the BTC blockchain that occurs approximately every four years. Miners are individuals responsible for the security of the BTC network, and their BTC rewards will be halved after the halving, which is expected to occur around April 20.

The purpose of this is to control BTC inflation, as this will slow down the rate at which new BTC enters the market.

Hougan said: "If we see this sustained demand that is greater than net supply, then it will have a positive impact on prices. Until long-term investors are comfortable with this and ready to sell, that will be the case This way."

To be sure, this is not a glide path to sky-high prices, and there are some caveats.

One of the risks remains the uncertainty posed by new regulations related to Crypto assets, especially during another contentious presidential election in the United States. Either outcome is expected to change the regulatory landscape.

Another variable is that in addition to the current BTC supply, there is a pool of BTC that has not been transferred.

Hougan said that about 70% of these capital pools are untapped, but the release of these capital pools may cause supply pressure and thereby drive down prices. These pools may be held by governments or frozen due to lawsuits related to bankrupt companies such as FTX.

This situation has already emerged after the launch of the ETF, and the BTC held by Grayscale experienced outflows after the transition from trust funds to ETFs. This dragged down BTC prices for a while, but as these outflows seemed to slow, BTC prices took off again.

Despite these risks, Hougan believes that ETF currently provides prospects for the adoption of BTC, and the situation it creates in the traditional financial field is expected to bring more returns.

Hougan said: "Wall Street's attention to BTC has now undergone a 'step' change, and I don't think the genie will go back into the bottle."