Wealth management firms to boost Bitcoin ETF holdings

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Bitwise CEO Hunter Horsley has predicted that wealth management firms will increase their Bitcoin exchange-traded funds (ETFs) in terms of holdings. The prediction comes at a time when Bitcoin ETFs are expected to gain even more traction after the halving. 

Horsley’s prediction aligns with the broader market belief that there is increasing demand for ETFs, given that Bitcoin BTC investments in the United States exchange-traded funds (ETFs) market recorded a net positive inflow right before the Bitcoin halving day following five consecutive days of drain.

BlackRock’s iShares Bitcoin Trust (IBIT) is closing the gap with Grayscale’s, standing just $2 billion shy. This positions BlackRock to potentially surpass Grayscale as the world’s largest Bitcoin fund. Grayscale’s Bitcoin Trust (GBTC) experienced a 68-day period of value decline, shedding nearly $16 billion and reducing its assets to $19.4 billion.

Source:  Hunter Horsley

In contrast, IBIT saw continuous asset growth, reaching approximately $17.3 billion in total assets. However, notable capital outflows have been observed from Grayscale’s spot Bitcoin ETF. Over the last five days alone, investors withdrew $89.9 million, contributing to a net outflow of $1.6 billion since January.

Despite its early lead, Grayscale’s supremacy in the Bitcoin ETF market seems to be diminishing. Fidelity and BlackRock quickly gained substantial market shares from the onset of trading. For instance, Fidelity and BlackRock Bitcoin ETFs experienced net inflows of $37.3 million and $18.7 million in the same week, providing relief to some of the market’s liquidity issues.

Related: Bitcoin mining stocks saw spikes across the board ahead of halving event

Bitwise CEO describes the adoption of Bitcoin ETFs by registered investment advisers (RIAs) and multifamily offices as “stealthy but significant.” He notes that major financial entities are discreetly conducting thorough assessments of the Bitcoin market.

According to Farside data, GBTC saw outflows of $17.5 million on April 10, a significant decrease from the $154.9 million outflows recorded on April 9. The previous low was on Feb. 26 when GBTC outflowed $22.4 million. The daily GBTC outflow average since January is $257.8 million.

GBTC launched in 2015 and converted to an ETF in January, alongside the launch of nine other spot Bitcoin ETFs after Grayscale won a lawsuit against the United States Securities and Exchange Commission, forcing it to review a GBTC conversion bid it previously denied.

Bankrupt crypto lending firm Genesis recently offloaded approximately 36 million GBTC shares to acquire 32,041 Bitcoin.

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