Wealth management firms to boost Bitcoin ETF holdings – Bitwise CEO

CEO of Bitwise, Hunter Horsley, anticipates an uptick in Bitcoin ETF holdings among wealth management firms. This forecast arises as Bitcoin ETFs prepare for increased popularity following the cryptocurrency’s halving event.

Horsley’s forecast agrees with the common market opinion that there is growing interest in ETFs for Bitcoin investment, as shown by the US market recording a surge in net investments just before the Bitcoin halving event, after five successive days of decline.

BlackRock’s iShares Bitcoin Trust (IBIT) is narrowing the difference with Grayscale’s trust, currently only $2 billion behind. This puts BlackRock in a strong position to possibly overtake Grayscale as the largest Bitcoin investment fund globally. Over the past 68 days, Grayscale’s Bitcoin Trust (GBTC) has seen its value decrease significantly, losing approximately $16 billion and leaving it with assets worth around $19.4 billion.

Wealth management firms to boost Bitcoin ETF holdings -  Bitwise CEO

Instead, IBIT experienced uninterrupted expansion in assets, amassing around $17.3 billion in total holdings. On the other hand, Grayscale’s Bitcoin spot ETF reported significant investor withdrawals. In just the past five days, investors withdrew approximately $89.9 million, leading to a total net withdrawal of over $1.6 billion since the beginning of the year.

Grayscale’s dominance in the Bitcoin ETF market, which it once held with an early lead, is now facing competition from new entrants like Fidelity and BlackRock. In just the first week of trading, these two companies saw significant growth, attracting $37.3 million and $18.7 million in net inflows respectively. This influx of funds has helped alleviate some liquidity concerns within the market.

The CEO of Bitwise asserts that the integration of Bitcoin ETFs by RIAs and multifamily offices is happening quietly yet carrying great impact. Notably, prominent financial institutions are meticulously evaluating the Bitcoin market behind the scenes.

Based on Farside’s findings, there was a notable decrease in GBTC’s outflows from $154.9 million on April 9 to $17.5 million on April 10. This figure was lower than the previous record of $22.4 million in outflows seen on February 26. On average, GBTC has experienced daily outflows amounting to $257.8 million since the beginning of January.

In January 2021, GBTC, which was launched in 2015 as a trust, underwent a transformation into an exchange-traded fund (ETF). This shift came following Grayscale’s victory in a lawsuit against the SEC, resulting in the regulatory body reconsidering its earlier denial of GBTC’s conversion application. Simultaneously, the SEC approved the launch of nine other spot Bitcoin ETFs.

Recently, Genesis, a crypto lending company that filed for bankruptcy protection, sold around 36 million shares of GBTC to obtain approximately 32,041 Bitcoins.

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2024-04-21 12:15