In a recent note to investors, Bitwise Chief Investment Officer Matthew Hougan predicts that institutional investors will invest over $1 trillion in cryptocurrencies through ETFs, driving Bitcoin to new heights. Despite the volatility of BTC, Hougan advises investors to remain calm and take a long-term perspective, as he believes that the current wave of institutional interest will push Bitcoin to $150,000 during the current bull run.
Hougan views the current inflow into Bitcoin ETFs by institutional investors as just the beginning, with only 1% of the expected total allocation. According to data from Farside, Bitcoin ETFs have already attracted over $26 billion since their launch in mid-January. BlackRock leads the race with $14 billion, followed by Fidelity with inflows of over $7.5 billion. Ark and Bitwise have attracted $2.3 billion and $1.6 billion respectively.
This influx of institutional money is believed to have contributed to Bitcoin reaching new highs of nearly $74,000 two months ago. However, Hougan, an expert in ETFs, believes that there is still much more money to come. In his note to investors, he explains the current state of the crypto ETF market and why he believes that the majority of the expected funds have yet to flow into Bitcoin.
Hougan, who previously served as CEO of ETF.com, acknowledges that BTC is currently experiencing short-term volatility and may be influenced by the halving event on April 20. However, he suggests that the approval of Bitcoin ETFs by major US players such as Morgan Stanley, Goldman Sachs, and Wells Fargo for their wealthy clients could be a game changer.
Hougan emphasizes that despite short-term fluctuations, Bitcoin is in a long-term bullish market. It has already seen a 300% increase in value over the past 15 months, and there are strong indications that this upward trend will continue.
The approval of ETFs in January was a significant milestone for Bitcoin, allowing sophisticated investors to include the cryptocurrency in their portfolios. Hougan points out that these institutional investors collectively control trillions of dollars, with an estimated total of at least $100 trillion. While it may take several years for a portion of this money to flow into Bitcoin, Hougan suggests that even a 1% allocation by global wealth managers could result in approximately $1 trillion of inflows into the space.
With institutional inflows of $26 billion already pushing BTC from $46,000 on January 12 to a new all-time high of over $73,680 this month, Hougan believes that $1 trillion of investment could push Bitcoin to even greater heights, potentially doubling its value and beyond.
