Investment Advisors Quickly Adopt Spot Bitcoin ETFs

Bitwise's Chief Information Officer (CIO), Matt Hougan, recently responded to a claim made by Jim Bianco, stating that only a small portion of the managed assets of spot Bitcoin Exchange-Traded Funds (ETFs) in the U.S. come from investment advisors.

Bianco referred to these ETFs as a “small tourist tool” implying limited adoption by advisors. However, Hougan disagreed and presented a different perspective.

He noted that while only $1.45 billion out of the $46 billion total inflow into spot Bitcoin ETFs comes from investment advisors, this still makes the BlackRock iShares Bitcoin Trust (IBIT) the second-fastest growing ETF of 2024, out of over 300 funds launched this year. He emphasized that despite the relatively small allocation from advisors, Bitcoin ETFs are being adopted by them faster than any other ETF in history.

Senior ETF analyst at Bloomberg, Eric Balchunas, supported Hougan’s assessment, noting that these inflows are “organic,” suggesting strong long-term adoption potential.

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Despite the recent significant outflows from U.S.-traded spot Bitcoin ETFs—totaling $706 million—Balchunas downplayed the seriousness, pointing out that this represents only 0.5% of their total assets under management.

Balchunas also highlighted that Bitcoin ETFs already have over 1,000 institutional holders, which he called unprecedented. He expects institutional and large advisory stakes in IBIT to double to 40% over the next 12 months, reflecting growing trust and interest in Bitcoin ETFs.