Professional investors are now favoring a 3% allocation to bitcoin, a significant increase from the previously conservative 1%, reports Bitwise CIO Matt Hougan. This shift, largely influenced by the introduction of U.S. spot Bitcoin exchange-traded funds (ETFs), marks a new era in cryptocurrency investment. The U.S. spot Bitcoin ETFs have already attracted about $11.7 billion in net inflows in just over two months, signaling a strong and sustained demand. Hougan notes that the perception of bitcoin’s risk has changed with the ETFs’ launch, encouraging investors to consider higher allocations.

Despite the enthusiasm in the U.S., the U.K. lags behind in adopting bitcoin ETFs, with most professional investors there still unable to participate. However, Hougan is optimistic, comparing the potential growth trajectory of bitcoin ETFs to the gradual but steady increase seen in gold ETFs over their first seven years. He anticipates a dampening effect on bitcoin’s volatility due to a new generation of investors who are more inclined to rebalance their portfolios, suggesting a more stable future for bitcoin investments.

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