Franklin Templeton Chief is Bullish of Bitcoin ETF Adoption Wave Looming
According to Jenny Johnson, institutions remain in a ‘wait and see’ mode with Bitcoin exchange-traded funds. This means there is a lot more put-aside capital waiting to pour in.
In an interview, Jenny Johnson, Franklin Templeton’s chief executive officer, claimed she is ‘feeling good’ about United States spot Bitcoin exchange-traded funds (ETFs). Her firm’s fund seeks to capture additional market share from an anticipated future rise in demand to hit the products.
Bitcoin ETF Adoption Wave Looming
In an interview published on June 4, Jenny noted that the second wave is yet to be witnessed. She revealed that this is the initial wave of the early adopters, and the next wave entails the more prominent institutions who are more comfortable with the manner in which it is settled out.
Following their unveiling on January 11, spot Bitcoin exchange-traded funds hauled net inflows of more than $13B. To date, they have taken in $14B. This aided in boosting the price of Bitcoin up more than 60% year-to-date to a new peak price of $73700 in March. BlackRock’s fund shattered all records for a recently unveiled exchange-traded fund.
From April to May, ETF inflows and price action stood still, resulting in the postulation that demand had already climaxed.
Nevertheless, several disclosures by the Securities and Exchange Commission (SEC) in April revealed that large companies and investors still comprised nearly 20% of the new Bitcoin exchange-traded funds’ assets under management.
Simply put, a majority of their initial demand originated from retail investors, while big institutions were dipping their tones in.
Professional Money Managers Integrating Bitcoin into Portfolio Strategies
Jenny noted that most professional money managers are still finding the means to integrate Bitcoin into their portfolio strategies. She said that, at the moment, Bitcoin is somewhat a risk-on, risk-off. It is, to some extent, like gold. Some think about it this way, while others think about it from a tech perspective.
Franklin Templeton runs one of the smallest Bitcoin spot exchange-traded funds in the nation by AUM, having only 6148 Bitcoins in its funds as of June 4, worth an estimated $440M. Also, its permanent sponsor fee is the smallest of any fund at only 0.19%, with its imminent Ethereum exchange-traded fund poised to match.
US Political Stance Becoming a Catalyst for Crypto Rally
Concerning the company’s Bitcoin offering, Jenny revealed that people must be fee-sensitive and hoped that they would capture additional market share. Officials at Bitwise, an asset manager behind a bigger United States spot Bitcoin exchange-traded fund, are certain that Bitcoin exchange-traded funds are due for a bigger wave of demand from institutions.
This will happen as present investors intensify their position sizes and potential investors complete product assessments for due diligence.
Political headwinds for crypto on Capitol Hill might be another significant adoption catalyst. In a blog post on June 4, Matt Hougan, Bitwise CIO, wrote that in case people comprehended the impacts of the shifts in D.C., the crypto market would be at new all-time highs.
Bitcoin exchange-traded funds made an absolute retaliation on June 4 with inflows of more than $886M.
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