James Seyffart, an ETF analyst at Bloomberg, asserts that the forthcoming phase of cryptocurrency exchange-traded fund (ETF) adoption will be propelled by financial advisers, wirehouses, and brokers catering to high-net-worth clients.
During his appearance on the “Coin Stories” podcast, Seyffart discussed the potential influence of these financial entities, which manage trillions in assets, in enhancing the Bitcoin ETF market.
He pointed out that Bitcoin (BTC) ETFs experienced an exceptionally successful inaugural year, exceeding the expectations of numerous analysts. While Bloomberg remains optimistic about these ETFs, he admitted that their actual performance has outstripped their projections.
Seyffart stated:
“There have been some outflows in recent weeks, but they have taken about, at their peak, just $40 billion since their launch. They currently hold around $110 billion in assets. IBIT is among the most frequently traded ETFs consistently, attaining $50 billion in just a couple of days; previously, that record took over a thousand days. So, no matter how you analyze it, they have shattered every record.”
In light of this momentum, he proposed that the gradual integration of Bitcoin ETFs as a portfolio allocation tool for affluent clients could foster ongoing success.
Entering the arena
Even with major firms, such as BlackRock advocating for a 1% to 2% BTC allocation within investment portfolios, Seyffart noted that “large wirehouses and prominent banks” are currently prohibiting investors from purchasing crypto ETFs.
He mentioned that wirehouses, financial advisers, and brokerage platforms manage substantial capital from ultra-wealthy individuals, including billionaires.
These entities wield considerable influence over asset allocation decisions across various financial portfolios. Seyffart posited that if these institutions start to incorporate Bitcoin ETFs as a small part of their portfolios, for instance, at 5%, it could result in sustained growth in adoption.
Beyond institutional adoption, Seyffart pointed out a growing trend of companies, states, and even nations adding Bitcoin to their balance sheets, which could enhance Bitcoin’s credibility and stability as an asset class within traditional finance.
However, he stressed that increased acceptance among financial intermediaries will likely serve as the primary catalyst for ETF growth.
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