Bitwise analysis: The four major U.S. brokers Merrill Lynch, Morgan Stanley, Wells Fargo, and UBS open Bitcoin ETFs by the end of the year

Matt Hougan, investment chief at crypto asset manager Bitwise, expects four major U.S. brokers, which manage multi-nuclear dollar assets, to open trading permissions for Bitcoin spot ETFs to its clients by the end of this year, a move that is expected to bring record net capital inflows to Bitcoin ETFs.

How many customers are there in the four major brokerage firms

According to The Block, Bitwise Investment Chief (CIO) Matt Hougan recently said that he expects the four major U.S. full-business brokerage dealers - Merrill Lynch, Morgan Stanley, Wells Fargo and UBS - to "open for business" by the end of 2025, allowing its financial advisers to allocate Bitcoin spot ETFs for clients.

Since the U.S. Securities and Exchange Commission approved the listing of the first bitcoin spot ETFs in early 2024, although it has attracted a lot of attention and initial capital inflows, the main buyer group has been independent registered investment advisors (RIAs) and retail investors. Large brokerage platforms have not yet opened access to these new products to their customers due to their strict internal due diligence procedures and compliance considerations.

Hougan pointed out that the addition of these large platforms may increase the accessibility of Bitcoin ETFs by about four times. Eric Balchunas, a senior ETF analyst at Bloomberg, also expressed a similar view that the adoption of large brokerage platforms is one of the two major catalysts for future capital inflows of Bitcoin ETFs (the other is the development of ETF-based option products).

Bitcoin bull market delays but expectations remain unchanged

It is worth noting that the timeline for large brokers to accept Bitcoin ETFs seems to be a little later than initially expected. Hougan himself and analysts such as Balchunas had previously predicted that the approval of the first batch of brokerage platforms may occur in the first half of 2024.

The reality is that the internal approval process of these large institutions is more complex and time-consuming than expected, Hougan describes it as a process that requires a series of "small passageways" to allow most of the U.S. wealth management funds to invest in these new products. These processes involve risk assessment, compliance review, investor suitability analysis, and providing relevant training and tools to financial advisors.

Despite the delay in the process, Hougan remains confident of achieving a breakthrough before the end of the year. He expects that once these internal obstacles are cleared, these platforms will gradually open up trading permissions for Bitcoin ETFs.

"At the beginning, we thought we might be only a few weeks before the approval of the first large brokerage firm, or even a week. (2024/03)"

Optimistic about capital inflows in 2025: The power of the latecomer may set a record

Based on expectations that large brokerages are about to enter the market, Matt Hougan made optimistic predictions about the inflow of funds to Bitcoin ETFs in 2025. He believes that although the rate of capital inflows from the beginning of 2025 to the present slowed down compared with the same period in 2024, he still expects that by the end of 2025, the cumulative net inflows of Bitcoin spot ETFs will hit a record high.

Hougan previously (February 2025) even predicted that the total inflow in 2025 could exceed $50 billion. He compared the growth trajectory of Bitcoin ETFs with gold ETFs, which more than doubled in the second year (2005) after its launch in 2004. He believes that with the increase in the allocation of Bitcoin by institutional investors and the opening of traditional wealth management channels, Bitcoin ETFs are also expected to usher in a second or even stronger wave of capital.

Standard Chartered Bank has also raised its Bitcoin price target for the year recently. Analysts believe that it will reach the $120,000 level this year. In addition, Bernstein has also made relatively positive estimates, but still believes that Bitcoin is expected to reach the $200,000 level this year. Institutions are making positive predictions about the Bitcoin prospects in the second half of the year.

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