Key Points
- James Butterfill, CoinShares Head of Research, predicts a positive demand shock for Bitcoin due to Registered Investment Advisors (RIAs) inflows.
- The lack of spot Bitcoin Exchange-Traded Fund (ETF) in the RIA market could be a significant factor in this potential demand shock.
James Butterfill, a crypto analyst and the Head of Research at CoinShares, recently highlighted in a blog post that Bitcoin (BTC) could experience a positive demand shock in the upcoming months. This shock is expected to be driven by inflows from Registered Investment Advisors (RIAs).
Factors Driving Bitcoin Demand Shock
Butterfill noted an important factor that could contribute to this potential positive demand shock. It is the absence of a spot Bitcoin Exchange-Traded Fund (ETF) in the RIA market. Fund platforms used by RIAs generally require three months of trading data before they can include newly issued ETFs.
As per Butterfill, the Carsen Group is currently the only investment advising firm that allows RIAs to trade spot Bitcoin ETFs. Considering the massive scale of the RIA industry, which is estimated to be worth approximately $50 trillion in assets, prospective inflows into Bitcoin could be highly significant.
Market Dynamics and RIA Role
Butterfill’s analysis is based on the current dynamics of the crypto market. He stated that since the launch of spot Bitcoin ETFs in the US, the average daily demand for Bitcoin has increased, while the production of new Bitcoin is significantly lower.
Recent data supports Butterfill’s view, showing that net inflows into spot Bitcoin ETFs have reached record highs. Last week alone, net inflows for the top ten Bitcoin ETFs totaled $2.57 billion. BlackRock Inc’s (NYSE: BLK) IBIT emerged as the biggest participant, with inflows totaling $2.48 billion.
RIAs are an important subset of financial consultants. They are distinguished by their fiduciary commitment to work in their clients’ best interests and are required to offer the lowest-cost solutions that meet their clients’ needs. RIAs are registered with either the SEC or state securities regulators, ensuring regulatory monitoring and client safety.
