Bitcoin prices hit $50,000 today, one month after the U.S. Securities and Exchange Commission approved 11 applications for Spot Bitcoin ETFs.
Issuers of these ETFs have seen demand soar beyond the billions originally predicted. These issuers have a total of approximately $28.35 billion in assets under management and a market capitalization of $39.8 billion, according to Blockworks data. The 24-hour trading volume was $1.38 billion.
Topping the Spot Bitcoin ETF pack is Grayscale Bitcoin Trust with $20.27 billion, followed by BlackRock's iShares Bitcoin Trust with $3.31 billion and Fidelity's Wise Origin Bitcoin.・The trust is worth $2.75 billion.
Image credits: Blockworks Bitcoin Spot ETF Tracker (Opens in new window)
“Sustained inflows and volumes have exceeded expectations,” said Matt Hogan, chief investment officer at Bitwise Asset Management. “The fact that we not only had inflows on the first day, but strong positive inflows in 18 of the first 19 days is really pleasing. And I became very optimistic about its importance in the world.”
Bitwise operates Bitwise Bitcoin ETP, which is currently the fourth largest spot Bitcoin ETF by market capitalization. However, the road to get here was not easy. In fact, Hogan said Bitwise held more than 20,000 meetings with financial advisors last year in preparation for expected approvals.
“We were nervous to launch, and while we’re not BlackRock, we’re not new to this space either. [But] We offer crypto funds, so we needed to be relevant,” Hogan said. Now, he believes ETFs have reached escape velocity and are “large enough to be sustainable from an economic standpoint.”
Bitwise's 0.20% fee is the second-lowest of these, but Hogan believes it's a “pretty good deal” for competitiveness. But he said it's unclear whether that interest rate will be maintained if the fund becomes extremely large.
“Right now we like our position.”
Hogan also believes demand will continue to increase as more national account platforms come online and inbound interest from larger institutions increases. “It’s not like they’re buying $100 million of Bitcoin today, but there’s a lot of inbound and meeting with platforms that have billions of dollars in assets.”
A month after it was approved, Hogan believes the Spot Bitcoin ETF will hold the title of “largest ETF launch in history.”
“Despite being in the ETF industry for 15 years, it's unlike anything I've ever seen…It's not just a little bit bigger. It's much bigger.”
Over the next 11 months, Hogan is optimistic that trading volumes will continue to increase as time passes and Bitcoin price stimulates demand. He added that the product's natural audience takes time to learn and make decisions, and it takes time to improve public accounts.
“I think it's going to be an uptick, a plateau, and then a re-acceleration,” Hogan said. “We don't see demand slowing down over the next 18 months. We expect these ETFs to set records.”
As for what happens next, Bitwise is leaving the door open to other products.
“We don’t have an application, but we are certainly thinking about Ethereum.” [spot ETFs] And you can imagine we're thinking of other things we can do with Bitcoin and Ethereum,” Hogan said. “We have entered the ETF era of cryptocurrencies and have proven that investors want to access cryptocurrencies through ETFs. We intend to offer those products to the extent possible under regulations. is.”