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Institutional investors would likely inject up to $1 trillion into bitcoin—Bitwise chief investment officer, Matthew Hougan

by Edison Irabor

Institutional investors would likely inject up to $1 trillion into bitcoin, says Matthew Hougan, the Chief Investment Officer at Bitwise.

According to Hougan in a tweet shared by Bitwise, “We are all excited about the $12 billion that has flowed into ETFs since January. And it is exciting: Collectively, the most successful ETF launch of all time. But imagine global wealth managers allocate just 1% of their portfolios to bitcoin on average.

It’s not crazy!

While Hougan understands that “past performance is no guarantee of future results”, he pointed out that “a 2.5% allocation to bitcoin has enhanced a traditional 60/40 portfolio’s risk-adjusted returns in every three-year period in bitcoin’s history.” 

Considering that $12 billion already flowed into bitcoin ETFs since 11 January 2024, Hougan states that “A 1% allocation across the board would mean ~$1 trillion of inflows into the space. Against this, $12 billion is barely a down payment”, representing “1% down, 99% to go.”

Read also: Bitcoin at all-time high of over $73,000: What is fueling the surge in the crypto market?

“Keep calm and take the long view”– Hougan

Bitcoin price has been fluctuating between $60,000 and $70,000. This, understandably, gets many holders and investors nervous. Hougan believes the fluctuations are expected in the short term:

“Bitcoin is in a short-term holding pattern. We are waiting for the bitcoin halving, which will arrive around April 20; waiting for bitcoin ETFs to be approved on national account platforms like Morgan Stanley or Wells Fargo, which could occur within the coming weeks; and waiting for various investment committees and consultants to schedule meetings, convene experts, and complete their formal due diligence efforts on bitcoin.” So for now, holders and investors should expect bitcoin to go sideways “on small changes in sentiment.” 

However, in the long-term, he believes that “bitcoin is in a raging bull market.” There are strong reasons to believe that bitcoin will continue to go up, having done nearly 300% in the past 15 months, he said.

Read also: How to Distinguish a Bull Run from a Bull Trap

Think about the implications, says Hougan.

The kind of investors presently coming into the bitcoin market “control tens of trillions of dollars”. Globally, “the best estimate is over $100 trillion—and they are just starting to move into crypto.” According to Hougan, this process will take years, not months. So it is a long-term affair, not a short-term one.

Meanwhile, Bitcoin halving is just 3 weeks away! 

Read also: Spot Bitcoin ETFs and the Crypto Market: The Other Side of the Coin

Risk Disclosure!

No financial advice is intended. Before making any investment decision, you must conduct your own independent investigation and research. The value of crypto assets is completely derived by market forces of supply and demand. They are more volatile than traditional bonds, currencies, or stocks. Consequently, trading in crypto assets comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks and risk of losing principal or all of your investment. Crypto asset trading can lead to large and immediate financial losses. 

Read also: Is the next bitcoin halving in 2024 going to be the magic wand for a bullish run?