Hougan’s Hot Take
First on his list is the wave of institutional approvals now clearing the path for major wealth managers to offer Bitcoin ETFs to their clients. He highlighted Morgan Stanley’s October 1 guidance, which allows its 16,000 advisors managing $2 trillion in assets to include cryptocurrency allocations of up to 4% for risk‑tolerant clients.
Wells Fargo has made a similar pivot, and the Bitwise exec suggested that firms including UBS and Merrill Lynch are likely to follow suit. While the rollout won’t happen overnight, conversations Hougan has had with advisors indicate strong pent‑up demand.
The second factor is what Hougan calls the “Debasement Trade,” referring to the growing interest in assets seen as hedges against currency debasement. Bitcoin, alongside gold, has been among the year’s best‑performing major assets. US monetary expansion since 2020 has been up 44% and has brought this trade into sharper focus, with major financial institutions, including JPMorgan, publishing reports spotlighting the strategy.
Hougan argued that advisors looking to showcase strong year‑end portfolio performance are likely to steer clients toward BTC ETFs, which is similar to last year’s preference for high‑performing tech equities.
Bitcoin Market Momentum
Hougan also pointed to Bitcoin’s own market performance as a fundamental driver of inflows. The crypto asset recently surpassed $126,000, as it broke past key psychological thresholds and posted a 9% gain in the first week of October alone.
Historically, quarters marked by double‑digit positive returns for BTC have coincided with billions in ETF inflows, a pattern Hougan believes will repeat in Q4.
Hougan’s bullish outlook is supported by early Q4 numbers as Bitcoin ETFs drew $3.5 billion in just four trading days, which has catapulted YTD flows to $25.9 billion. With 64 trading days remaining, the exec predicts that the sector could easily exceed $10 billion more in inflows, and could also potentially surpass last year’s record‑setting $36 billion.