Bitwise CIO Matt Hogan has claimed that investment advisors are adopting a spot Bitcoin (BTC) exchange-traded fund (ETF) faster than any other recently launched ETF.
Hogan made the remarks in response to a Sept. 8 social media post from researcher Jim Bianco, who argued that less than 10% of assets under management in U.S.-traded spot bitcoin ETFs come from investment advisers. He added that ETFs are a “little tourism tool” rather than an adoption vehicle.
Nearly $1.5 billion from advisors
Hogan analyzed the net inflows related to investment advisory activity for BlackRock's iShares Bitcoin Trust (IBIT) and found it to be $1.45 billion, which he agreed with Bianco is certainly small compared to the total inflows of $46 billion from spot Bitcoin ETFs.
However, if you exclude all other inflows from the Bitcoin ETF and focus only on the $1.45 billion in inflows tied to investment advisors, Hogan explained, IBIT becomes the second-fastest-growing ETF out of more than 300 funds launching in 2024.
He added:
“The only ETF that “betters” it by assets is KLMT, a $2 billion ESG ETF launched by a single investor, employs zero advisors, and averages about 250 shares per day.”
Hogan further emphasized that investment advisors are adopting the Bitcoin ETF faster than any other ETF in history, despite having relatively small amounts of capital invested compared to other investors.
Hogan added:
“Their historic inflows are simply eclipsed by even more historic purchases from other investors.”
Eric Balchunas, senior ETF analyst at Bloomberg, agreed with Bitwise CIO's sentiment, confirming that the roughly $1.5 billion allocation to advisors represents more “organic inflows” than any other ETF launched this year.
Not so amazing
Jim Bianco's post on X comes in the wake of massive outflows recorded last week from U.S.-traded spot Bitcoin ETFs. According to data from Far Side Investors, ETFs as a whole lost $706 million last week, with nearly $288 million recorded in outflows on Sept. 3.
Balchunas noted that the massive outflow represents 0.5% of the Bitcoin ETF’s total assets under management, making it “not that staggering.” The Bloomberg analyst added:
“(People) are so warped (or rather, spoiled) by the size of the inflow that they panic when there is even a small spill – 'Princess Pea Syndrome'.”
Balchunas further explained that when asset prices fall, dollar-denominated assets under management can fall, so the correct way to gauge an ETF's health is to track its flows.
Finally, he emphasized that the Bitcoin ETF has over 1,000 institutional investors holding the fund over two 13F periods, adding that this is “unprecedented.”
Balchunas added that 20% of IBIT's shares are held by institutional investors and large advisors, and he expects this figure to reach 40% within the next 12 months.
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