‘Think of it as Bitcoin’s IPO’: BTC to enter new price discovery post-ETF, Bitwise says

Bitcoin Matt Hougan, chief investment officer at Bitwise, said the company is ready to break new ground following the success of its recently approved exchange-traded fund (ETF) and that the BTC price could surpass $80,000 this year.

early success Bitcoin ETFs have shattered records among similar products, sparking sustained flows into Bitcoin since mid-January. In an interview with decryptionHougan said Bitwise has launched the BITB spot ETF. 9 others January 10, After years of hearing from customers expressing interest in this type of product, we anticipated there would be a lot of demand.

Still, Hougan said the continued demand over the past month has been surprising, considering the more gradual growth ETFs typically experience after launch. He suggested that demand for Bitcoin will increase as more institutions invest along with the expanded access they provide.

“Think of the ETF launch as a Bitcoin IPO in the U.S. market,” Hougan said. Decrypt. “It generated tremendous interest in traditional finance and exceeded my expectations.”

In fact, while spot Bitcoin ETFs have historically been successful by every metric, Bitwise has performed particularly well on its own. On the last day alone, Bitwise received the following information: $126.5 million The inflow is the second largest inflow after online, and recently Exceeded 1 billion dollars From assets under management. This puts you in a tier containing only: Blackrock, Fidelityand 21 weeks of Ark Invest until now.

Despite the current availability of ETFs, not all financial institutions have access to them yet and most trading has been conducted by individual investors, Hougan said. While this is still a long way off for entities such as banks and financial firms to enter the market, this is to be expected, Hougan explained, noting that all ETFs undergo extensive due diligence by these institutions before being offered to customers.

Like any other asset, the price of Bitcoin is influenced by supply and demand, and a “second wave” of institutional demand promises: raise the price, according to analysts. In our own research Bit-by-bit prediction At the start of the year, Bitcoin will be trading above $80,000 between inflows into spot ETFs and an expected supply crunch due to the upcoming Bitcoin halving.

Halving refers to an event that occurs programmatically on the Bitcoin blockchain approximately every four years. Bitcoin rewards to miners, the individuals responsible for securing the Bitcoin network, will be cut in half after the halving, which is expected to occur. April 20th. This is intended to curb BTC inflation by slowing down the amount of new Bitcoin entering the market.

“If we see this kind of sustained demand that is greater than net supply, that will be positive for prices,” Hougan said. “It’s going to go on like this until long-term investors are happy with it and ready to sell.”

Clearly, this is not a glide path to sky-high prices and there are caveats.

One of them remains the risk associated with new regulations related to cryptocurrencies, which create uncertainty, especially during another contentious presidential election in the United States. Either way, it promises change in the regulatory environment.

Another variable is the existence of an immobile pool of Bitcoin outside of the current supply. About 70% of this grass—You may be involved in litigation involving government-held or insolvent companies such as: FTX—Although it hasn’t been tapped yet, Hougan said the launch could create supply pressure that would push prices down.

After the ETF was launched, this was already observed in the outflow of Bitcoin held by Grayscale after converting from a trust to an ETF. This caused the price to fall for a while, but as these outflows slowed, the price of Bitcoin rose again.

Despite these risks, Hougan argues that the current picture of Bitcoin adoption provided by ETFs promises greater returns from the openings they create in the world of traditional finance.

“There has been a ‘step function’ change in the level of interest that Wall Street is currently paying to Bitcoin, and I don’t think the genie is going back into the bottle,” Hougan said.