Matt Hougan, Chief Investment Officer at Bitwise Investments, joined Keith Black, Managing Director of RIA Channel, to discuss spot bitcoin ETFs and the valuation case for Ethereum.
Bitwise is a specialist crypto manager with $4 billion AUM across 20 different strategies, including seven ETFs.
After the January 2024 launch, spot bitcoin ETFs became the fastest-growing ETFs ever, reaching $13 billion in flows in just a few months. Previously, the fastest ETF launch raised $5 billion in its first year. Hougan attributes the success of the spot bitcoin ETFs to the strong returns of bitcoin, as well as its low correlation to financial market asset returns. Because more than ten spot bitcoin ETFs were launched simultaneously, competing firms offered very low fees. The Bitwise Bitcoin ETF (BITB) charges just 0.2% annual fees.
While bitcoin is the largest digital currency with over 50% of the industry market capitalization, Ethereum is the second largest with market cap that varies between 10% and 20% of the industry total. Hougan notes that Ethereum and bitcoin have very different roles, with bitcoin striving to serve the role of a store of value, or “digital gold.” Ethereum is a programmable blockchain ecosystem, where smart contracts can be deployed to replicate a variety of businesses, including banks, exchanges, and tracking property ownership records. The Ethereum ecosystem may be the foundation of a new iteration of the Internet or an app store.
Similar to commodities, bitcoin is valued using supply and demand analysis. Ethereum earns cash flows from users who access smart contracts or offerings from the app store. The more popular stablecoins and decentralized finance applications become, the greater the cash flows earned by Ethereum.
WEBCAST – Investing in Crypto: Building a Crypto Sleeve
From the most successful ETF launches of all time to bipartisan support for pro-crypto legislation in D.C., the developments across the crypto industry over the past twelve months are nothing short of remarkable. As these developments capture the attention of Wall Street, it’s more critical than ever for advisors to understand investing in crypto. In this webinar, Bitwise Head of Research, Ryan Rasmussen, and Chief Investment Officer, Matt Hougan, will dive into how investors should think about investing in crypto, how crypto fits in a portfolio, and how to build a crypto sleeve.
Topics include:
- The latest developments in crypto markets
- Crypto’s journey to mainstream adoption
- A commonsense guide to crypto in a portfolio
- How to build a comprehensive crypto sleeve
Accepted for 1 CFP® / IWI / CFA CE Credit