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Legislation under consideration in the U.S. could require stablecoin issuers to back their tokens with liquid assets like U.S. dollars and treasury bills, potentially making them significant players in the Treasury market. Currently holding $166 billion in U.S. treasuries, stablecoins could become the third-largest buyers of Treasury bills, with the market projected to grow to $2 trillion by 2028. However, experts warn that increased ties between crypto and traditional finance may introduce systemic risks, as seen in past incidents affecting market stability.
Wealthy investors are increasingly allocating up to 5% of their portfolios to cryptocurrencies, driven by concerns over inflation and currency volatility, according to UBS. This shift marks a departure from traditional asset models, as younger investors embrace digital assets for long-term growth, while older clients remain cautious, viewing crypto as a complementary investment.
Merrill Lynch, Morgan Stanley, Wells Fargo, and UBS are projected to begin offering Bitcoin ETFs by year-end, according to Bitwise CIO Matt Hougan. He anticipates that Bitcoin ETF inflows will exceed $35 billion by the end of 2025, driven by a shift towards institutional investment. BlackRock's Robert Mitchnick noted that institutional clients now hold a larger share of Bitcoin ETF investments compared to retail investors, indicating a significant change in market dynamics.
Bitwise CIO Matt Hougan forecasts that Merrill Lynch, Morgan Stanley, Wells Fargo, and UBS will fully open access to spot Bitcoin ETFs by the end of 2025. With these firms managing over $10 trillion in assets, this move is expected to drive record inflows into Bitcoin ETFs, indicating a significant shift towards institutional adoption of cryptocurrency investment products.
The SEC has extended its review period for Bitwise's application to list the Bitwise 10 Crypto Index ETF on NYSE Arca, with a new decision deadline set for March 3, 2025. The fund, which tracks the top ten crypto assets including Bitcoin and Ethereum, currently trades on the OTCQX Best Market. Bitwise's CEO emphasizes the potential benefits of the ETF format, while the SEC remains cautious, focusing on issues like market manipulation and investor protections.
Bitwise CIO Matt Hougan predicts a significant increase in corporate Bitcoin purchases over the next 12 to 18 months, driven by new accounting standards that make Bitcoin more appealing for balance sheets. While MicroStrategy leads with over 257,000 BTC acquired, 70 public firms, including Tesla and Coinbase, already hold 141,302 BTC, with private entities like SpaceX holding an additional 368,043 BTC. This trend is fueled by reduced reputational risks and motivations such as financial gain and currency protection, as Bitcoin's price rebounds to $95.5K.
In a recent memo, Bitwise CIO Matt Hougan predicts that hundreds of companies will adopt Bitcoin for their treasuries within the next 12-18 months, significantly impacting the market. He highlights that 70 publicly traded companies already hold Bitcoin, with MicroStrategy's acquisitions surpassing last year's mined supply. Favorable reputational shifts and new accounting guidelines are expected to drive this corporate adoption, potentially leading to a substantial increase in Bitcoin's price.
A recent survey by Bitwise reveals a significant increase in cryptocurrency interest among U.S. financial advisors following Donald Trump's election. 56% of respondents are now more inclined to invest in crypto, with digital asset allocations doubling year-over-year to an all-time high of 22%. Despite challenges in accessing crypto for client accounts, regulatory concerns have eased, with 50% citing it as a top obstacle, down from previous years.
Investor confidence in Ethereum is rising, with whales accumulating the cryptocurrency and non-exchange wallet balances increasing by 25,000 tokens. Analyst Ali Martinez predicts a potential surge to $7,000 if prices drop to $2,900, supported by a bullish inverted head-and-shoulders pattern. Additionally, exchange-held Ether supply has decreased, reinforcing the optimistic outlook for Ethereum's future.
The first year of US spot Bitcoin ETFs has surpassed expectations, attracting $44.2 billion in inflows and marking the best-performing ETF launch ever. Analysts attribute this success to strong institutional demand, favorable market conditions, and the SEC's approval, which alleviated regulatory concerns. Looking ahead, industry experts anticipate continued growth in 2025 as more investors gain access to these products.
Matt Hougan
People
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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