Bitwise Prepping as if Spot Bitcoin ETF Is Coming

Matt Hougan, chief investment officer of crypto investment firm Bitwise Asset Management, said that while he's aware that regulators are yet to approve a spot bitcoin ETF, his team is “preparing as though there’s going to be a launch.” 

“We're preparing marketing and sales strategies and press and all those things, and we're working with regulators to try to push things ahead,” he said in an interview with etf.com. "But until you cross the finish line, you just don't know."

As the race to launch the first ETF that tracks physically backed cryptocurrency heats up, many firms are jockeying to grab market share, because multiple firms, including investment giants BlackRock and Fidelity Investments, could get Securities and Exchange Commission approval simultaneously. Bloomberg analysts give a 90% chance of a spot bitcoin ETF approval by Jan. 10.  

Hougan said that he has met with regulators to discuss the firm’s spot bitcoin filing in past months and that “all the firms” are meeting with the SEC regularly. 

Industry experts predict investors will pour billions into the funds once they are approved. Aspiring issuer VanEck, predicted $2.4 billion would flow in the first quarter after the funds' approval. Hougan sees more than $50 billion in the assets in the first five years after the ETFs launch and projected the funds will become among the “most successful ETF launches of all time.” 

Yet Hougan noted that as opposed to the launch of bitcoin futures ETFs, a few players will win the vast majority of market share, not just one firm. 

“There's this perception in ETF land that it's winner take all and that’s built on a history where an ETF came to market first,” he said. “[But what] are the examples where ETFs lined up in Washington all at the same time? “None.” 

Spot Bitcoin ETF Race 

Hougan expressed confidence that Bitwise, which has $10 million in assets under management in four ETFs, can compete with big firms such as BlackRock and Fidelity, saying that Bitwise’s crypto-centric approach and work with financial advisors will set it apart.  

Hougan added he would be surprised if every firm filing with the SEC actually launches a product—even if they are all approved—pointing to formidable infrastructure and legal hurdles.

“It's pretty easy to file, but it's not as easy to launch, and it's not as easy to sustain," he said.

The biggest Bitwise ETF that trades on U.S. markets is the Bitwise Bitcoin Strategy Optimum Roll ETF (BITC) with $4.6 million under management. 

Contact Lucy Brewster at [email protected].