Bitcoin ETF Inflows Could Eclipse $1 Trillion, Predicts Bitwise CIO

Following a week of net outflows, the spot Bitcoin ETF market has rebounded with impressive net inflows this week, highlighting a growing investor confidence in Bitcoin and its associated financial products. This week’s market activities have shown a remarkable reversal from the previous 5-day net outflow streak, with Tuesday witnessing a substantial net inflow of $480 million, followed by $243.5 million on Wednesday.

Yesterday’s resurgence in investor interest was notably boosted by Blackrock’s massive inflow of $323.8 million, effectively offsetting Grayscale GBTC’s $299.8 million outflows. Moreover, Ark Invest’s ARKB reported its best day yet, with $200 million in inflows, despite Fidelity experiencing its worst day with a mere $1.5 million in outflows. Nevertheless, Fidelity managed to bounce back with significant inflows of $261 million and $279 million on Monday and Tuesday, respectively. See more

Yesterday's ETF flows were positive for $243.5 million. Blackrock finally woke up again for $323.8 million completely cancelling out 's $299.8 million outflows. Ark had their best day yet with $200 million. Fidelity had its worst day with $1.5 million. Price dumped on… — WhalePanda (@WhalePanda)

1% Down, 99% To Go For Bitcoin ETFs

However, according to Bitwise Chief Investment Officer (CIO) Matt Hougan, this is just the mere beginning of what is to come in the upcoming months. Hougan’s , part of his weekly memo to investment professionals, sheds light on the current market dynamics and the colossal potential that lies ahead. “1% Down; 99% to Go,” Hougan wrote, highlighting the nascent yet promising journey of Bitcoin ETFs.

Lately, the market has been characterized by its volatility, with Bitcoin’s price oscillating between $60,000 and $70,000. Hougan advises a calm and long-term perspective amidst this fluctuation, especially as the sector anticipates the upcoming Bitcoin halving around April 20, the approval of Bitcoin ETFs on national account platforms, and the soon-to-come completion of due diligence by various investment committees.

Despite the current sideways movement of Bitcoin’s price, Hougan remains bullish about its long-term trajectory. “Bitcoin is in a raging bull market,” he asserts, noting a nearly 300% increase over the past 15 months. The launch of spot Bitcoin ETFs in January has marked a significant milestone, opening up the Bitcoin market to investment professionals on an unprecedented scale. Hougan’s analysis points to a profound shift as global wealth managers, who collectively control over $100 trillion, begin to explore investments in the “digital gold.” He suggests that even a conservative allocation of 1% of their portfolios to Bitcoin could result in approximately $1 trillion of inflows into the space. This perspective is backed by historical data showing that even a 2.5% allocation to Bitcoin has enhanced the risk-adjusted returns of traditional 60/40 portfolios in every three-year period of Bitcoin’s history. The recent inflows into Bitcoin ETFs, though impressive, are seen by Hougan as merely the beginning of a much larger movement. “We are all excited about the $12 billion that has flowed into ETFs since January. And it is exciting: Collectively, the most successful ETF launch of all time..But imagine global wealth managers allocate just 1% of their portfolios to bitcoin on average,” Hougan elaborates, emphasizing the scale of potential growth awaiting the cryptocurrency market. He concludes:

Think about the implications. […] A 1% allocation across the board would mean ~$1 trillion of inflows into the space. Against this, $12 billion is barely a down payment. 1% down, 99% to go.

At press time, BTC traded at $70,644.