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Friday, April 12, 2024

Bitcoin ETFs to Attract $150 Billion by 2025, Outshine Gold ETFs

In an age where digital assets are making an unprecedented mark on the global economy, Bitcoin ETFs are predicted to see an influx of approximately $150 billion by 2025, chiefly driven by independent advisories.

The Path to a $150,000 Bitcoin

Bitcoin ETF
Credits: DepositPhotos

This forecast was brought to light in a recent Exchange ETF conference held in Miami, where Ric Edelman, founder of the Digital Assets Council of Financial Professionals, and Matt Hougan, Chief Investment Officer at Bitwise Asset Management, highlighted the basis of these projections.

Independent advisors currently oversee around $8 trillion in assets, and surveys have shown that approximately 77% of them aim to incorporate Bitcoin into their portfolio. On average, the target allocation stands at 2%-3%. 

If we exclude inflows from wirehouses, regional broker-dealers, and institutional investors, Edelman’s predictions still set Bitcoin to value around $150,000 within the coming two years.

A limited supply coupled with robust demand could trigger a rapid surge in Bitcoin prices. Hougan echoed these sentiments, emphasizing that financial advisors are generally long-term investors who gear their allocations towards the future.

Read More: Crypto Market Soars Past $2T as Bitcoin Leads Revival

ETFs – Regulated, Efficient, and Alluring

Bitcoin
Credits: DepositPhotos

Speaking to the ETF landscape, both Edelman and Hougan acknowledged that spot Bitcoin ETFs not only mark a triumph for the crypto sector but also for the overall ETF industry. 

With price tracking accuracy, easy access to comprehensive data, and the promise of simplicity and security coupled with low fees, ETFs provide a sense of calm for investors.

Ultimately, the appeal of spot ETFs will pivot on the financial advisor market. Independent registered investment advisors and wirehouses that approve the ETF product are also likely to invest in spot Bitcoin ETFs.

Portfolio Diversification and Stability

Other main highlights from the conference included the acceptance that spot Bitcoin ETFs play a crucial role in portfolio diversification. 

Bitcoin is viewed as a non-correlated asset that can be applied expertly for rebalancing, leading to a less volatile portfolio.

Also Read: Dogecoin Soars on Mars Speculation After MyDoge CEO’s Tweet

Outperforming Gold ETFs

In the broader ETF market, Bitcoin ETFs seem to be gaining the upper hand against gold ETFs. 

As an example, Hougan mentioned the Bitwise Bitcoin ETF, which is winning over investment advisors, family offices, and individuals who are rotating from higher-fee products.

Bitwise charges 20 basis points, which is half that of the fees for the largest gold ETF. 

Hougan goes on to draw parallels with the SPDR Gold Trust—the first gold ETF—post-launch performance to underscore how the Bitcoin ETF is following a similar trajectory—eight days of positive flows, one day of negative flows, and eleven days without movements.

Hougan concluded the event by stating that the sustained demand seen for Bitcoin ETFs is, indeed, “remarkable.”

This shift towards digital assets showcases the evolving nature of our financial landscape with cryptocurrencies such as Bitcoin taking the center stage. 

As our world leans further into the realm of digitalization, Bitcoin and its ETFs stand ready to meet the demand of savvy investors.

Read Next: Hong Kong Poised for Financial Revolution with Proposed Yuan-Backed Stablecoin

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