The price of Bitcoin (BTC) is expected to soar beyond $80,000 this year thanks to the recent success of exchange-traded funds (ETFs), according to Bitwise Chief Investment Officer Matt Hougan.
The approval of Bitcoin ETFs has shattered records and triggered an influx of funds into the cryptocurrency since mid-January.
In a recent interview, Hougan highlighted the sustained demand for ETFs, which has exceeded his expectations.
He said that this wave of interest from traditional finance, akin to Bitcoin’s IPO in the US market, will lead to further institutional investment and drive up prices.
“Think of the ETF launch as Bitcoin’s IPO in the U.S. market. It has just unleashed a huge wave of interest from traditional finance, and it has exceeded my expectations.”
Bitwise’s ETF Sees Increased Inflows
Bitwise, in particular, has experienced significant success in the ETF market.
In just one day, the company received approximately $126.5 million in inflows, marking its second-largest intake since its launch.
It has also surpassed $1 billion in assets under management, placing it alongside industry giants such as BlackRock, Fidelity, and Ark Invest’s 21Shares.
Remember that trends are sustainable as long as opinion is fairly heterogenous.
That no longer seems to be the case.
No more sidelined capital, at least from the crypto native side.
Increasingly feel like everyone is leaning bullish & waiting for the ETFs to carry the market.
— 10Δ (@_10delta_) February 18, 2024
However, despite the availability of ETFs, not all financial institutions have gained access to them.
Retail investors have been the primary participants in trading thus far, while banks and wirehouses are still conducting extensive due diligence before offering ETFs to clients.
Nevertheless, analysts believe that the increased demand from institutions will contribute to a supply crunch and subsequent price surge.
Spot Inflows and Halving to Drive BTC toward $80,000
Bitwise’s research predicts that Bitcoin will trade above $80,000, driven by inflows into spot ETFs and the upcoming Bitcoin halving.
The halving, which occurs approximately every four years, will reduce the rewards for Bitcoin miners, thereby limiting the supply of new Bitcoin entering the market.
While the positive outlook for Bitcoin’s price is based on sustained institutional demand, there are potential obstacles to consider.
Regulatory uncertainties surrounding cryptocurrencies, particularly in the context of the forthcoming US presidential election, create an air of unpredictability.
Additionally, the existence of untapped pools of Bitcoin, held by governments or tied up in litigation, could introduce supply pressures that may temporarily hinder price growth.
Hougan acknowledged these risks but remains optimistic about Bitcoin’s adoption facilitated by the availability of ETFs.
The increased attention from Wall Street represents a significant shift that is unlikely to be reversed, signaling a promising future for Bitcoin within the realm of traditional finance.
As reported, gold ETFs have faced significant outflows this year, while ETFs tracking the spot price of Bitcoin have seen strong inflows.
The leading 14 gold ETFs have experienced outflows of $2.4 billion in 2024 as of February 14.
Among the gold ETFs, only three have seen minor inflows this year: VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF, and Proshares UltraShort Gold.
In contrast, preliminary data from Farside shows that the ten approved spot Bitcoin ETFs have attracted aggregate inflows of around $4 billion this year, reaching record volumes.
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