According to Bitwise CIO Matt Hougan, the big four U.S. wirehouses—Merrill Lynch, Morgan Stanley, Wells Fargo, and UBS, which collectively manage over $10 trillion in client assets—could open full access to spot Bitcoin exchange-traded funds (ETFs) before the year runs out.Â
Hougan made the forecast about the big four U.S. wirehouses opening up to BTC ETFs after he gave the closing speech on day 1 of a national wirehouse conference.
His prediction suggests that the four big firms will soon allow their financial advisors to offer Bitcoin ETF services to clients, which could potentially drive significant cash inflows into the ETFs.
About to orange pill a room of financial advisors that manage >$1 trillion at the Barron’s Top 100 Conference. Wish me luck! pic.twitter.com/ElObcnQOWS
— Matt Hougan (@Matt_Hougan) September 20, 2024
Hougan is optimistic about the big four U.S. wirehouses getting involved with BTC ETFs
If Hougan’s prediction holds, the development could extend the reach of Bitcoin ETFs and set a new record for net inflows in 2025. As things stand, there have only been about $3.7 billion in inflows this year, a meager value compared to the $35 billion that flowed in last year.
Even though crypto now has a foot in the corridors of power, the four major wirehouses have still not allowed their advisors to interact freely with Bitcoin ETFs. However, Hougan says that is changing fast.
Already, Morgan Stanley has started allowing some high-net-worth clients to invest in BlackRock and Fidelity Bitcoin ETFs, a process that started in August 2024, though with limited access.
Merrill Lynch and Wells Fargo have also similarly offered Bitcoin ETFs to select wealth management clients who specifically request them since early 2024. However, they don’t offer the option as a broadly solicited service.
UBS and Citigroup are the same. They have also permitted some clients to buy Bitcoin ETFs, and have a high potential to get rid of the imposed limits soon.
Aside from the obvious shift that has allowed all four major wirehouses to dabble in BTC ETFs to a limited extent, Hougan’s prediction is rooted in the growing institutional interest in Bitcoin, which brings it a step closer to mass adoption.
Of course, Hougan admits there will be challenges, especially skepticism among potential investors who worry about what will happen to Bitcoin’s value if belief in it wanes.
What happens if interest in Bitcoin wanes?
“What would it be worth if the music stopped?” was the exact question Hougan was asked by a skeptical person who had been in the audience while he gave his speech.
“The answer, of course, is nothing,” Hougan wrote. “If no one in the world wants to own bitcoin, the value of bitcoin is zero.”
He tried to point out that this was also true of gold, but the investor claimed gold is different, and Hougan was forced to agree.
“With gold, you still have the shiny physical thing. With bitcoin, you have … literally nothing,” he rationalized before admitting that the “intangible nature of bitcoin is a challenge.”
But should that stop any investor from taking the risk? Hougan doesn’t think so. As far as he is concerned, anybody waiting for Bitcoin to become a preferred option over gold or for BTC to stop being so volatile is never going to buy Bitcoin.
Hougan could convince the skeptic to make a decision to invest by asking a simple question he suggests any investor seriously considering BTC needs to ask: “what will it take to make you believe?”
If what it will take is institutional adoption, that is already happening at a dizzying pace, and if corporate adoption or regulatory stability is what it will take, those are already happening too.
Hougan believes the question can help any investor honestly decide whether or not to buy BTC. If it worked for the skeptic he met at the conference, he asserts that it will work for many others.
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