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Bitcoin ETF Outperforms Expectations, Says Bitwise CIO

Last Updated April 1, 2024 2:57 PM
Shraddha Sharma
Last Updated April 1, 2024 2:57 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • Bitcoin ETFs have outperformed several exchange products.
  • Matt Hougan, Bitwise CIO noted that the product surpassed previous records and expectations.
  • However, he advises a strategic wait before launching Ethereum ETFs.

Matt Hougan, Chief Investment Officer at Bitwise, spoke about the success and the diverse investor base of Bitcoin ETF in an interview. While the Bitwise CIO said that the product performance exceeded his expectations, it might be a whammy for the upcoming decision on Ethereum ETF.

Bitcoin ETF Sees Massive Investor Interest

According to Matt Hougan, the Bitwise Bitcoin ETF has seen an influx of investments, accumulating over $10b in under two months.

He told Forbes : “[Spot bitcoin ETFs] are the fastest growing ETFs of all time by a large fraction. I believe the fastest growing ETF prior to these was the Nasdaq 100 ETF (QQQM), which went from zero to $5 billion in one year.”

He reiterated that Bitcoin ETFs as a class “exceeded” his expectations.

That said, in the week prior to April 1, Bitcoin ETFs clocked in $862 million in inflows as billions of dollars keep entering the asset class. 

Hougan sheds light on the varied demographic of investors showing interest in Bitwise’s Bitcoin ETF. From retail investors and independent financial advisors to hedge funds and venture capitals, the appeal of a crypto-native ETF has reached a broad audience as per the CIO.

Interestingly, allocations are not just from individuals but also include corporate investors, an unexpected development for Hougan.

He said: “I’ve certainly been surprised by the adoption from hedge funds and VCs and corporates—that was not a group I expected to come in as fast, but it’s happening.”

Bitcoin ETF Appeal Overshadows Ethereum

Hougan expressed Bitwise’s keen interest in expanding into the Ethereum market with spot ETFs. He stated: “We’re very interested in ether spot ETFs. We intend to be a player in that space and a big player.”

The CIO said that an Ethereum ETF launching in May was possible but unlikely. He emphasized his confidence in the approval of an Ethereum ETF, despite the regulatory challenges.

Hougan explained: “We’re conducting research in the Ethereum space. I will say that the data looks good, so we intend to get there and file. We just haven’t gotten to it yet.”

While he predicts that Bitcoin investors will eventually seek broader exposure, he suggests a wait. The CIO opined that an Ethereum ETF might see greater success if launched in a year rather than in the immediate future. He said: “I think the ether ETFs will be more successful if they launch in 12 months than if they launch in May.”

According to Hougan, the traditional finance sector (TradFi) is still adjusting to Bitcoin and the broader concept of cryptocurrency. He believes that, if this sector is given enough time to become familiar and comfortable with Bitcoin, it will be more open to exploring other cryptocurrencies, such as Ethereum. Hougan hopes for a later Ethereum ETF launch, possibly around December.

CCN previously reported that Bloomberg analysts are keeping the likelihood of an Ethereum ETF in May at a low 25%. Meanwhile, S-1 and 19-b filings by Ethereum ETF issuers continue to reach the SEC.

Ethereum ETFs Could Wait

Bitwise CIO underlined the spot bitcoin ETF performance has not only exceeded expectations but has also highlighted the diverse interest in the investment. However, Matt Hougan opines that after the success of Bitcoin ETFs, investors might eventually look for additional exposure. For this, he asks for at least 12 months for another series of Ethereum-backed approvals.

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