Excitement about pending approval of Bitcoin ETFs that have hitherto failed to win clearance from regulators has sparked speculation about the further rapid growth of the crypto market. But the speculation has actually been riding high for months now. One of the most breathless predictions came from Brown Brothers Harriman (BBH).
In an interview aired on Bloomberg Podcasts on May 15, host Eric Balchunas spoke with BBH’s Global ETF Head Shawn McNinch. They discussed the findings of BBH’s 10th Annual ETF Survey. Among the most startling? The growing acceptance of Bitcoin ETFs will push them up to $30 trillion in global asset value over the next ten years.
Brown Brothers Harriman’s Bullish Prediction
The market has been abuzz in recent days as Grayscale Investments and other players have vocally challenged regulators’ denying approval of Bitcoin ETFs. But the BBH pollsters saw which way the wind was blowing months ago.
McNinch placed the survey’s findings in the context of growing adoption of Bitcoin ETFs. And their now very mainstream character.
“If you think about ETFs, they are really now core, at the center of a lot of investors’ allocation strategy. There’s more and more usage of ETFs, more asset classes, more structures,” McNinch said.
It is hard to question the BBH survey on methodological grounds. The results come from 325 respondents around the world. A full 40% of whom manage more than a billion dollars in assets.
One of the most startling findings? A full 60% of investors polled said that they plan to increase their use of Bitcoin ETFs.
“It’s not just a passive product,” McNinch stated.
McNinch identified the “big three” of Bitcoin EFTs as those that Vanguard, BlackRock, and State Street Global Advisors have made available. With such leading names in finance staking their reputation and resources on the product, it seems all but inevitable that Bitcoin ETFs will continue to proliferate and be part of the suite of products that asset managers of all profiles offer.
Growing Investor Confidence
McNinch made clear that Bitcoin ETFs did not start out at the top. Their mainstream acceptance has been a process, he acknowledged.
“Early on, people were really concerned about volume, making sure these products traded well,” he said.
But these concerns abated in the face of strong performance.
“Looking at the ETFs that trade, it’s almost a given that there are tight spreads, investors can come in and out of the market in a cost-effective way,” he said.
But Europe and other regions may have a steeper hill to climb, given the “fragmented” nature of exchanges, McNinch cautioned.
“There’s fragmentation, 20 different exchanges in the European marketplace, whereas in the US you have centralized liquidity in a few exchanges,” McNinch continued.
“Over in Europe, there’s a large OTC market, so a lot of the trading volume is off-exchange,” he added.
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