Wall Street’s Newest Toy: Bitcoin ETFs Go Mainstream as Major Brokerages Flip the Switch
Fidelity and Schwab just rolled out the red carpet for spot Bitcoin ETFs—because nothing says ’institutional adoption’ like repackaging crypto for retirees’ IRAs.
The 800-pound gorilla in the room? These same firms blocked crypto access for years until the SEC caved. Now they’ll happily skim fees off both sides of the trade.
Next stop: Bitcoin 401(k)s... just in time for the next halving pump.
$95,004 ETFs to their clients before the end of the year. These firms collectively manage over $10 trillion in client assets, and Hougan suggests that this move will quadruple institutional access to spot Bitcoin ETFs. Although interest in ETFs, including Bitwise’s BITB fund, has been below expectations, changes may take place in the latter half of the year.
ContentsWall Street Giants Set to Embrace ETFsBelief and Institutional Shifts to Shape Market’s Future
Wall Street Giants Set to Embrace ETFs
Although Bitcoin ETFs were launched in the U.S. at the start of 2024, access remained particularly limited at major brokerage firms. Morgan Stanley permitted certain high-net-worth clients to invest in BlackRock and Fidelity’s Bitcoin ETFs last August, but access was restricted to investors with a taxable portfolio above $1.5 million. Hougan indicated that such restrictions are soon to be lifted.
Hougan compared the placement of Bitcoin ETFs on major investment platforms to putting a product on a massive market shelf. This visibility not only facilitates access for individual and institutional investors but also boosts market confidence. Bloomberg analyst Eric Balchunas agreed, stating that integrating ETFs into large platforms could rapidly increase demand for these funds.
Belief and Institutional Shifts to Shape Market’s Future
In a recent keynote at the National Brokerage Conference, Hougan emphasized that belief in Bitcoin is the most significant factor affecting its price. When asked by an investor about the consequence if people lost faith in Bitcoin, Hougan unequivocally responded, “Nothing.” He noted that this condition applies to other assets like gold as well.
Hougan acknowledged the challenge of convincing skeptical investors in the cryptocurrency market but underscored that numerous significant players now operate at an institutional level. He highlighted that giants like Fidelity and Coinbase provide custodial services, while market makers such as Jane Street and Cumberland/DRW play active roles.
Presently, nine out of the world’s largest ten hedge funds hold BTC. The Texas Teacher Retirement Fund, Emory University, and notable figures like RAY Dalio and Stan Druckenmiller are also Bitcoin investors.
According to Hougan, such examples seemed impossible just a few years ago. Today, with clear regulations in the U.S. Congress, BlackRock’s advice for a 2% Bitcoin allocation, and even the U.S. considering a strategic Bitcoin reserve, the landscape is changing. Hougan is confident that this shift will convince many, noting in his speech, “A person I just met thought, took a deep breath, and said, ‘I will buy Bitcoin.’ I think many will make the same decision this year.”
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