Matt Hogan, chief investment officer at asset management firm Bitwise, said in a Sept. 9 post on the X-Platform that wealth advisors are adopting Bitcoin (BTC) exchange-traded funds (ETFs) “at a faster pace than any new ETF in history.”
Hogans post It was a response to my previous X. post Investment researcher Jim Bianco characterized BTC ETF adoption among wealth advisors as “low,” noting that roughly 85% of BTC ETF adoption “is not coming from traditional financial institutions.”
BlackRock's iShares Bitcoin Trust ETF (IBIT) attracted $1.45 billion in net inflows from wealth advisors, according to Hogan. Bianco said he calls this “small” because it's “only a fraction of the total $46 billion that has flowed into Bitcoin ETFs.”
“The reality is that investment advisors are adopting a bitcoin ETF faster than any ETF in history,” Hogan said. “Their historic flows are simply being eclipsed by the even more historic purchases from other investors.”
Wealth advisors, from independent registered investment advisors (RIAs) to large brokerages like Morgan Stanley, are an important market segment for U.S. cryptocurrency ETFs.
Federico Brocate, head of U.S. operations at crypto ETF issuer 21Shares, told Cointelegraph in August that wealth advisors co-manage up to 50% of the ETF's inflows.
Investment researcher Jim Bianco called Bitcoin ETF adoption “small scale.” Source: X
Related: Cryptocurrency reaches next stage of adoption: Gaining support from financial advisors
Bianco's comments come on the heels of 11 U.S.-based spot BTC ETFs recording a combined net outflow of roughly $1.2 billion over the past eight days. The outflows follow a period of underperformance for BTC, with spot prices dropping roughly 17% since August 26.
Longer-term trends indicate continued adoption of BTC ETFs among wealth management advisors. In August, Morgan Stanley, the largest asset management firm in the U.S., authorized 15,000 financial advisors to begin recommending BTC ETFs.
Additionally, according to Nate Geraci, president of The ETF Store, the four largest ETFs launched so far this year are all BTC ETFs.
“We are seeing increased appetite among RIAs to invest in spot Bitcoin ETFs, especially larger, more liquid products like IBIT,” Roxana Islam, head of sector and industry research at VettaFi, told Cointelegraph in August.
Despite this growth, significant barriers remain: According to a survey by fund research firm Cerulli Associates, over 55% of RIAs said they “have no plans to use or discuss cryptocurrency investments with their clients in the future,” and only 2.6% are actively recommending cryptocurrencies to their clients.
Still, “if we exclude all other flows and look only at the $1.45 billion associated with investment advisors, IBIT would be the second fastest-growing ETF launched this year… [o]”I've had over 300 launches,” Hogan said.
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