After the success of the recently approved exchange-traded funds (ETFs), Bitcoin is gearing up to chart new territory.
According to Matt Hougan, the Chief Investment Officer at Bitwise, the price of the largest crypto in the market can surpass $80,000 this year.
Bitcoin ETFs
Since their landmark approval in January, Bitcoin ETFs have managed to shatter records of similar products due to their early success.
There has been a huge inflow of funds in Bitcoin and Bitwise was also one of the companies that had launched its spot Bitcoin ETF called BITB, along with nine others.
Hougan said that they were expecting a considerable amount of demand for the product, given that customers have been expressing their interest in it even before its introduction.
Even then, Hougan added that the sustained demand that had been seen in the past month had been quite surprising, considering that ETFs usually experience gradual growth after their launch.
He said that since Bitcoin ETFs offer expanded access, the demand for Bitcoin is expected to grow because more institutions are expected to invest in it.
Hougan said that the launch of the Bitcoin ETFs was like Bitcoin’s IPO in the market in the US. It has generated a massive interest from traditional finance and it has managed to exceed expectations.
Bitwise
There is no denying that spot Bitcoin ETFs have proven to be a success by every historic metric and Bitwise has also done quite well in this regard.
On the last day, the total inflows that Bitwise recorded in its spot Bitcoin ETF stood at $126.5 million, which is the second largest inflow since it went online.
Bitwise recently saw the total assets under management in its ETF cross the $1 billion mark.
This puts it in the same tier that only comprises Fidelity, BlackRock, and Ark Invest’s 21Shares up until now.
Hougan said that even though ETFs have now become available, they are still not accessible to every financial institution and retail investors have been doing most of the trading.
Companies like wirehouses and banks have not yet entered the space and Hougan said that this is because they perform extensive due diligence before offering these products to their clients.
The demand
Just like other assets, the supply and demand determine the price of Bitcoin and analysts believe that the ‘second wave’ of demand would push up the price of Bitcoin.
Bitwise said in its research at the beginning of the year that Bitcoin would trade above the $80,000 mark due to the inflows into spot Bitcoin ETFs and the supply crunch that Bitcoin halving would create.
The halving is an event that has been programmed into the Bitcoin blockchain and happens every four years.
It reduces the Bitcoin rewards for miners and it is expected to happen this year on April 20th. The purpose of the process is to prevent Bitcoin inflation because it controls the supply of Bitcoin.