"And that would be in addition to the money that's already in GBTC that would convert," he said, referring to the Grayscale Bitcoin Trust.
The panel on "The Outlook for Crypto ETFs and Tokenization," which was moderated by Deborah Fuhr, managing partner and founder of ETFGI, also included Yassine Elmandjra, crypto lead at ARK Investment Management. Bitwise and ARK are among a number of firms, including BlackRock, that have filed with the Securities and Exchange Commission to offer spot bitcoin ETFs.
While the SEC has approved bitcoin futures ETFs, it has yet to allow a spot bitcoin ETF.
"I do think, if you look at the history of inflows into novel ETFs, that people will be initially disappointed," Hougan said.
While he's seen "ridiculous predictions on Twitter," a social media platform now known as X, that spot bitcoin ETFs will take in $10 billion, $20 billion or $30 billion in the first year, "there's just no precedent in the history of ETFs for that," the CIO said.
Hougan pointed to State Street Global Advisors' SPDR Gold Shares, the first U.S.-traded gold ETF, which goes by the ticker symbol GLD.
"And if you look at GLD, it got $3 billion in year one, but it didn't really hit its stride (until) year five, six or seven," he said. "So, I suspect that people will overestimate the short-term impact and underestimate the long-term impact, but I really think it's transformational and I'll give the gold example again."
When the gold ETF first came to market, gold was something people bought in things such as coins, bars and Krugerrands, which they put under mattresses and didn't discuss in polite conversation, Hougan said.
"And the gold ETF really mainstreamed it so that everyday financial advisers and institutions could talk about gold the same way they talk about real estate," he said. "And I think a bitcoin ETF will do that. We're already seeing that."
The day BlackRock announced it was coming into the market, "was the last day that I heard anyone ask me about FTX," he said, referencing the collapsed cryptocurrency empire founded by Sam Bankman-Fried.
When it comes to a crypto-specific product, Elmandjra believes that investors are likely to converge toward asset managers "that have a lot of familiarity with the space" and aren't just looking to ride momentum, he said. Elmandjra recommended going to the various advisers' websites to see when they first started talking about bitcoin, and whether that was a few months ago or several years ago.
Hougan said he fully agreed with that point.
"There's a perception big dogs coming into the space — the BlackRocks, Invescos — will dominate, but this is an ETF-savvy room," the Bitwise CIO said, adding that those in the room know that in specialty areas, "it's often specialty providers that lead."
Anna Paglia, global head of ETFs, indexed strategies, SMAs and models at Invesco, said in written comments Oct. 5 that while "it's true that specialty providers can succeed in certain segments of the market, it is also true that leading ETF providers are big for a reason: They have the experience, strength and infrastructure to help clients achieve their investment objectives."