Morgan Stanley is allowing its 15000 strong network of financial advisors to actively suggest to clients at least two of the recently launched bitcoin ETFs—the Fidelity Wise Origin Bitcoin Fund and iShares Bitcoin Trust.
Matthew Hougan predicted last October that $55 billion would be invested in spot bitcoin exchange-traded funds (ETFs) within the first five years of their launch.
Data from TrackInsight says that as of August this year, about eight months into their launch, 10 new funds approved by US regulators collectively have a value of more than $52 billion.
CEO of cryptocurrency company Bitwise Investments, Hougan commented critically that he wasn’t too optimistic and that this will be a domain where hundreds of billions of dollars will be measured.
These products follow the price of Bitcoin, which has fluctuated repeatedly since it was founded 16 years ago and kicked off the cryptocurrency age. Some players in the market claim that Bitcoin is extremely risky and volatile, more like fine wine or art than gold or commodities.
The path to gaining widespread recognition as a mainstream asset may be slow and gradual. But August marked a significant milestone.
Morgan Stanley is allowing its 15000 strong network of financial advisors to actively suggest to clients at least two of the recently launched bitcoin ETFs—the Fidelity Wise Origin Bitcoin Fund and iShares Bitcoin Trust.
John Hoffman, the head of distribution and partnership at Grayscale Funds, whose company’s Grayscale Bitcoin Trust wasn’t included in the initial round of products added to Morgan Stanley’s platform, says that it is now unacceptable to neglect the due diligence and research necessary to understand these products.
Risk has shifted from the wealth management channel to the risk of not making progress.
Most of the new ETFs are invested by retail investors. Only a handful of organisations, like the state of Wisconsin’s investment board and some hedge funds whose positions have been publicly disclosed, are available through regulatory filings.
According to the CEO of CF Benchmarks, which created the bitcoin index underpinning several ETFs, the first 50 billion were made by people who know bitcoin well.
However, early adopters like Morgan Stanley are receiving a lot of attention for the amount of ground crypto ETFs need to cover to become part of the popular investing product.
For Lom, the new ETFs’ size and liquidity will be the true test of whether they achieve mainstream status.
The second challenge is whether model portfolios, which are one-stop investment solutions financial advisors rely on to help them make asset allocation decisions, will add them to the mix. Even some of Bitcoin’s passionate supporters acknowledge that it lies at least six to twelve months away.
What about Ether ETFs?
Spot Ethereum ETFs have a less certain future if Bitcoin ETFs are headed toward mainstream investment vehicles.
Track Insight reports that in the month after their July 23 launch, the Ether group’s assets were valued at about 7 billion dollars. BlackRock’s iShares Ethereum Trust has hit $900 million in assets, surpassing the total number of ETF launches. However, it suffers compared to BlackRock’s bitcoin product, which reached $1 billion in its first four trading days.
The head of research at 21 Shares, one of the companies launching a spot ether ETF in July, says that many people are excited until the launch, but later it isn’t. With a lot of awareness and time, people would share more excitement about it.
Others are more cautious, pointing out that ether isn’t just a small crypto but a very different one.
As people use oil to make the real world work, people need Ethereum to move assets around the digital network.