Wealth advisers are adopting Bitcoin (BTC) exchange-traded funds “faster than any new ETF in history,” Matt Hougan, asset manager Bitwise’s chief investment officer, said in a Sept. 9 post on the X platform.
Hougan’s post was in response to an earlier X post by investment researcher Jim Bianco, who characterized BTC ETF adoption among wealth advisers as “small,” noting that approximately 85% of BTC ETF uptake “is NOT from tradfi institutions.”
BlackRock’s iShares Bitcoin Trust ETF (IBIT) attracted $1.45 billion in net flows from wealth advisers, according to Hougan. Bianco “calls this ‘small’ because it’s a fraction of the $46 billion that has flowed into Bitcoin ETFs in total,” he said.
“The truth is that investment advisers are adopting Bitcoin ETFs faster than any other ETF in history,” Hougan said. “It is just that their historic flows are overshadowed by the even-more-historic purchases of other investors.”
Wealth advisers — ranging from independent registered investment advisers (RIAs) to large wirehouses, such as Morgan Stanley — are a crucial market segment for United States cryptocurrency ETFs.
Federico Brokate, who heads US business for 21Shares, a crypto ETF issuer, told Cointelegraph in August that wealth advisers collectively control up to 50% of ETF inflows.
Investment researcher Jim Bianco described Bitcoin ETF adoption as “small.” Source: X
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Bianco’s comments come as the 11 US-based spot BTC ETFs saw combined net outflows of some $1.2 billion in the last eight days. The outflows follow a stint of poor price performance for BTC, with spot prices dropping approximately 17% since Aug. 26.
Longer-term trends point to continued BTC ETF adoption among wealth advisers. In August, Morgan Stanley, the largest wealth manager in the US, authorized its 15,000 financial advisers to start recommending BTC ETFs.
Additionally, according to Nate Geraci, president of The ETF Store, the four largest ETF launches so far this year are all BTC ETFs.
“We are seeing more willingness among RIAs to invest in spot Bitcoin ETFs — particularly with larger, liquid products” such IBIT, Roxanna Islam, head of sector and industry research at VettaFi, told Cointelegraph in August.
Despite this growth, significant barriers still remain. According to research by fund researcher Cerulli Associates, upward of 55% of RIAs “have no expectation of using or discussing cryptocurrency investments with their clients at any point in the future” and only 2.6% are actively recommending crypto to clients.
Still, “if you excluded all other flows, and just looked at the $1.45 billion linked to investment advisers, IBIT would be the 2nd fastest-growing ETF launched this year… [o]ut of 300+ launches,” Hougan said.
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