TL;DR
- Institutional adoption: Wealth managers like Morgan Stanley and Wells Fargo are approving bitcoin ETF allocations, signaling broader acceptance.
- Price momentum: Bitcoin’s surge above $125,000 has historically aligned with billions in ETF inflows, fueling investor enthusiasm.
- Debasement trade: With money supply up 44% since 2020, gold and bitcoin are top performers, driving record ETF demand.
Bitwise Asset Management is projecting a record-breaking fourth quarter for U.S. spot Bitcoin ETFs, with inflows expected to surpass the $36 billion total set in 2024. Chief Investment Officer Matt Hougan told clients that despite a slower pace earlier this year, the final months of 2025 are primed for a surge, fueled by wealth manager approvals, Bitcoin’s price momentum, and the growing appeal of the so-called debasement trade.
Wealth managers open the gates
Institutional adoption is gaining traction as major firms like Morgan Stanley and Wells Fargo introduce formal crypto allocation policies. Morgan Stanley now recommends allocations of 2% to 4% for higher-risk portfolios, while Wells Fargo has also cleared advisors to include Bitcoin ETFs. UBS and Merrill Lynch are expected to follow, signaling a broad shift across advisory networks. Hougan noted that conversations with advisors reveal pent-up demand, suggesting inflows could accelerate as year-end reviews approach.
Bitcoin price surge drives attention
Bitcoin’s rally past $125,000 in early October, before settling near $122,744, has reignited investor enthusiasm. Historically, double-digit quarterly returns have coincided with double-digit billions in ETF inflows. Bitwise argues that renewed media coverage and investor attention will likely sustain momentum, with Hougan pointing to early Q4 flows of $3.5 billion as evidence of strong appetite.
The debasement trade narrative
The debasement trade, a strategy favoring assets that benefit from currency erosion, is becoming mainstream. With the U.S. money supply up 44% since 2020, both gold and Bitcoin have emerged as top-performing assets. JPMorgan recently highlighted the trend, and Hougan expects advisors to add exposure to capture performance. The narrative is resonating with investors seeking protection against inflationary pressures, positioning Bitcoin ETFs as a key beneficiary.
Record inflows are already building
In just the first days of Q4, Bitcoin ETFs have attracted $3.5 billion in net flows, bringing the year-to-date total to $25.9 billion. Another $875.6 million was added Tuesday, led by BlackRock’s IBIT with $899.4 million. On Monday, ETFs recorded their largest daily haul since November 2024, pulling in $1.21 billion. Hougan believes surpassing $36 billion by year-end is not only possible but likely, with 64 trading days left to capture another $10 billion.
