Reporting live from the Bitcoin (BTC-USD) Investor Day event in New York City, Yahoo Finance's Brad Smith is joined by Bitwise Asset Management Co-Founder and CEO Hunter Horsley to talk about bitcoin ETF activity as traditional investors become more encouraged to invest in crypto via ETFs.. Bitwise runs its own spot bitcoin ETF (BITB) and several crypto industry ETFs (BITC, BITQ, BITW, BTOP).
"The Bitwise bitcoin ETF, in two months, has grown to over $2 billion in assets. It was in one of the 25 fastest ETFs to a billion [dollars] in the 30-year history of ETFs," Horsley explains. "And what that represents is a whole new class of investors who feel they've heard about bitcoin for a long time, but finally, in 2024, they can participate. They can access it."
Horsley also comments on bitcoin's price action and the likelihood of the Securities and Exchange Commission (SEC) approving a spot ethereum (ETH-USD) ETF.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
- Welcome back to Yahoo Finance. We are live from the Bitcoin Investor Day, the inaugural Bitcoin Investor Day, I might add. And we're joined now here by Hunter Horsley, who is the Bitwise Asset Management CEO and co-founder. Great to have you here with us.
- It's great to be with you, yeah.
- Absolutely. I mean, we've got a vibing event taking place here today. Bitwise is represented. We know that Scaramucci, we know that Novogratz and Galaxy have all been here. Why do you think this meeting of the minds is so critical at this juncture for crypto?
- Yeah, I think that-- so Bitwise have been around for over six years now serving investors across the country. I think that a lot of investors are very familiar with crypto, with Bitcoin, but the launch of Bitcoin ETFs was a turning point for the space. And I think that now is the time that a lot of traditional investors finally feel that they can engage, and events like this are helping make that happen.
- When we think about the ETF activity that we've seen as of recent, of course, milestone marker for the entire industry. We've seen a little bit of outflows recently. For your own firm, how do you think about that kind of day-in and day-out inflows, outflows, and ultimately what the selling point is for a lot of new people who are still trying to figure out whether or not it's right for their portfolio?
- Yeah. It has been stunning, to be honest, to watch these Bitcoin ETFs come to market. The bitwise Bitcoin ETF in two months has taken in-- has grown to over $2 billion in assets. It is in the 25 fastest ETFs to a billion in the 30-year history of ETFs.
And what that represents is a whole new class of investors who feel they've heard about Bitcoin for a long time but finally in 2024 they can participate. They can access it.
I almost sometimes think of it as being a bit like Bitcoin's IPO. Maybe you've heard of AI. You've heard of OpenAI. But for most people, even though you're hearing about it, can't necessarily invest in what's happening there until OpenAI goes public one day. And for many investors, Bitcoin has been like that.
Particularly, a lot of our clients that are wealth management firms or institutional investors, they've been interested. But now, with the Bitcoin ETF, like the Bitwise Bitcoin ETF, they can get access. And so we've seen a huge amount of uptake in the 9 or 10 weeks since they launched.
- When we look at the equity markets, and we typically are tracking perhaps a multiday or multisession selloff, the investor sentiment can grow a little bit weary. It can be asking questions of, OK, what is the correct trade? Do I also need to get out of a position?
When we see a multiday-type of slippage in crypto, what is the thinking that you're hearing from some that are out there right now?
- Yeah. Yeah. That's a great question. Right now, amongst our client base, I would say that people are pretty optimistic about the outlook for Bitcoin. We haven't seen clients really change their mind or change their positioning.
Bitcoin is, of course, if you zoom out, up over 40% year to date, which is doing what people would hope for the asset class. It had an amazing year last year. And a lot of our clients take a long-term outlook. They invest because they have a view on what might happen over the course of a year or multiple years.
- I think a reason that a lot of clients work with Bitwise is as a specialist in this space is because the space moves so fast, and when you have a week where the market is having volatility or something's happening that you don't understand, they love being able to have a partner in the space that can take them through what's going on.
But I don't think that there's a really important development behind the price action this week. I think it's pretty typical Bitcoin volatility. And for some investors, that creates opportunity. But I don't think that there's a real change to the fundamental opportunity of Bitcoin.
- You've already got the Bitwise Bitcoin ETF out in the market. When Ethereum, do you think, next?
- Yeah. So at Bitwise, we've been around for over six years. We have over 15 investment solutions. We launched a crypto equity-- an ETF that holds crypto equities. It was the first ETF that the SEC allowed to have crypto in the name.
We have the largest publicly-traded crypto index fund, and I say that to indicate that we view our role as a specialist in the space as working to bring opportunities to investors when that becomes possible and when an opportunity matures.
So we're working on an Ethereum ETF as well.
- How soon could we see that?
- So the SEC has a deadline to make a decision of May 23rd, which is not too far off. I think right now, if you ask most issuers, you would say it's 50/50 what will happen. But our approach always has been to be a constructive partner to the SEC in evaluating the risks and considerations. And so if it doesn't happen in May, we'll continue working on it.
- Just lastly, while we have you here as well. This is an atypical setup that we have going into a Bitcoin halving where you've got all-time highs that Bitcoin and the crypto market cap that's trying to get back to but Bitcoin has already struck. What does that set up for this, having to be different, perhaps, in the price action that we might see?
- Yeah, so historically, halvings are sort of become a focal point in advance because of the way that they reduce the amount of new supply, and that impacts price because of the supply-demand dynamic.
Looking at prior halvings, there is usually a bull market, an extended bull market after the halving regardless of what happens before. Beforehand, investors are trying to price in or speculate about the impact of the halving. But after it happens, it's like initiating a buyback program for a stock.
Investors can take views on that in advance, but once the program begins, the company's out there buying back its own stock every day, and that has an impact on the market. And similarly, with the halving, it will definitely have an impact, and I think it'll be very constructive to Bitcoin for Bitcoin investors.
- Hunter Horsley who is the Bitwise Asset Management co-founder and CEO, Thanks so much for taking the time.
- Absolutely. My pleasure.