Bitwise CIO Matt Hougan said that institutions “representing trillions of dollars in assets” are expected to start investing in spot Bitcoin ETFs by the second quarter.

Hougan made the revelation in a weekly memo sent out to investors, parts of which were shared on social media.

Influx of institutional interest

Hougan wrote that Bitwise, and likely the other Bitcoin ETF issuers, are engaged in “serious due diligence discussions” with a variety of major financial and corporate entities that are interested in gaining Bitcoin exposure.

He added that these entities include “major wirehouses, institutional consultants, and large corporations,” without disclosing further details about their identities.

According to the Bitwise CIO, entities in these three categories will initiate the “first significant flows” into Bitcoin in the second quarter. He added that the flows are expected to “accelerate throughout the year.”

The projection is based on a growing comfort level with digital asset products and a recognition of their potential to offer diversified investment opportunities.

Bitcoin ETF buyers

Since their US debut on Jan. 11, spot Bitcoin ETFs have swiftly amassed over $8.9 billion in net inflows, marking them as some of the most successful ETF launches in history.

This surge in interest has prompted many to ask a critical question within the investment community: who is fueling this remarkable growth?

Hougan’s memo revealed that spot Bitcoin ETFs have garnered widespread interest from all types of investors, ranging from individual retail investors to sophisticated entities like hedge funds and asset managers.

He wrote:

“The introduction of Bitcoin ETFs was heralded as a bridge for professional investors to enter the Bitcoin market. Our experience over the past seven weeks emphatically confirms this.”

Notably, Registered Investment Advisors (RIAs), family offices, and venture capital funds have also been allocating exposure to BTC, which signifies the wide-ranging confidence in the potential of these ETFs.

This inclusivity signals a significant shift in the market trends, offering professional investors a regulated and familiar avenue to explore the burgeoning world of crypto investments.