Bitwise CIO Predicts Crypto ETPs Will Gobble Up 5% of Portfolios by December

Wall Street’s late-stage crypto FOMO is about to hit overdrive—Bitwise’s top strategist sees exchange-traded products sucking up billions before New Year’s Eve.

Forget ’alternative assets.’ The CIO claims 5% crypto allocations will soon be as standard as that third espresso at your 7am pitch meeting.

Bonus jab: Nothing cures institutional cold feet like watching competitors print money. Even if they still don’t understand blockchain.

Institutions adjust crypto allocations

Asset managers have historically advocated modest crypto allocations, citing volatility and risk concentration. In December, BlackRock’s Investment Instituteas a “reasonable range” for multi-asset portfolios. 

That recommendation has since translated into practice. BlackRock incorporated Bitcoin (BTC) into its $150 billion model portfolio offerings via the iShares Bitcoin Trust (IBIT), assigning a 1% to 2% weight in target allocations.

The launch of US spot Bitcoin and ethereum (ETH) ETPs in 2024 provided regulatory-compliant exposure mechanisms at scale for institutional clients, prompting many advisors to reevaluate their crypto positioning.

Hougan also reported increased advisor inquiries about Ethereum, stating he fielded more questions on the asset “in the past few days than the past six months.” 

Bitcoin and Ethereum draw parallel interest

While Bitcoin remains the dominant product by scale, Ethereum has emerged as a key area of curiosity for professionals, according to Hougan.

Bitwise shared in April that US spot bitcoin ETPs held $93.2 billion in assets under management (AUM) as of December 2024, contrasting with spot Ethereum ETPs that totaled $6.3 billion in AUM. 

Despite the disparity, ownership of both products is dispersed across key institutional categories.

In Bitcoin ETPs, hedge funds (36.97%) and investment advisors (33.11%) account for most institutional ownership. 

On the other hand, Ethereum ETPs show more balanced exposure between investment advisors (29.79%), brokerages (25.25%), and hedge funds (24.74%), while family offices show a.

Investment advisors and hedge funds allocated 5.8% and 4.5% of their total crypto allocation to Ethereum, while family offices had 25% of their nearly $173 million crypto allocation targeted to Ethereum.

Hougan’s remarks reinforce industry expectations that professional investment access to crypto is entering a new maturity phase. As product availability widens and allocation norms shift upward, crypto may play a more regularized role in portfolio construction.