Bitwise’s Matt Hougan: Spot Bitcoin ETFs 101

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On this episode of ETF Prime, host Nate Geraci speaks with a trio of individuals discussing several ETF-related topics. His guests include VettaFi’s Todd Rosenbluth, who shares his take on the launch of spot bitcoin ETFs and more. Geraci also speaks with Bitwise’s Matt Hougan to discuss his firm’s spot bitcoin ETF journey and does a deep dive into how these products work. To close the podcast, Geraci brings on Calamos’ Matt Kaufman to discuss the Calamos CEF Income & Arbitrage ETF (CCEF).

The Launch of Spot Bitcoin ETFs

To open this week’s podcast, Geraci brought on VettaFi’s Head of Research, Todd Rosenbluth. Rosenbluth joined the podcast to give his take on the launch of spot bitcoin ETFs. The duo first reflected on how monumental it was to see Bitwise and Matt Hougan participating at the NYSE. Additionally, the pair reflected on the large amount of marketing and media coverage that the launch of these products garnered. Geraci then asks Rosenbluth for his take on the launch of these products.

“This is a tremendous milestone for the ETF industry,” Rosenbluth shared.

Rosenbluth mentions that in his ETF experience, he has never seen anything like the spot bitcoin saga. He names the fee war these products had before their launch and the strong trading volume these products saw on their first day of trading as events that surprised him. Rosenbluth also noted that Vanguard’s reaction to the release of these products was noteworthy.

Advisor’s Cryptocurrency Usage

The conversation then shifted gears to the cryptocurrency at large when Geraci and Rosenbluth discussed VettaFi’s January 12 Cryptocurrency Symposium. VettaFi hosted the event to help advisors gain a better understanding of the industry overall. Geraci then highlighted how the event helped produce some data regarding advisors’ cryptocurrency usage.

He then shared some of the data from the event regarding factors investors are looking at when choosing among spot bitcoin ETFs. The data revealed that investors are looking at the expertise of the firm, and liquidity when choosing between the products. Geraci shared that he would have expected expense ratios to be the top answer to that question. He then mentions how surprised he was to see that it wasn’t. Geraci then asked Rosenbluth for his take on this data obtained by VettaFi.

“I was thrilled with this because, as you know, I don’t think expense ratios should be the driving factor when choosing an ETF,” Rosenbluth said.

Rosenbluth highlighted that, while all of these products own spot bitcoin, and expense ratios should be more meaningful, he doesn’t feel that in this situation that is the case. He also mentioned that advisors sharing that the expertise of the firm mattered to them excited him.

That’s because of all of the different levels of expertise among the issuers whose 10 spot bitcoin ETFs launched last week. In addition, the duo continued to discuss more of the data obtained by VettaFi at its Cryptocurrency Symposium and more.

Bitwise’s Spot Bitcoin Journey

Geraci then brings on Matt Hougan, chief investment officer at Bitwise, to discuss his firm’s entrance into the spot bitcoin ETF world with its fund, the Bitwise Bitcoin ETF (BITB). The pair first discussed the process Bitwise went through to get its ETF approved. As the conversation developed, Geraci asked Hougan if there was ever a point at which he felt these products would not get approved.

“Everything was lining up for approval, so we felt very confident. But you always have in the back of your mind that this was crypto,” Hougan shared.

Hougan highlighted that the craziness of the entire saga contributed to him doubting the approval of these products. However, once he saw the first trade officially go through, the doubt lifted off his shoulders, and he was grateful for the approval of the products.

Moreover, the duo discussed the ins and outs of how these spot bitcoin ETFs work. The duo explores this to give investors and advisors a deeper understanding of these products.

Calamos CEF Income & Arbitrage ETF (CCEF)

To close this week’s podcast, Geraci brought on Matt Kaufman, head of ETFs at Calamos, to discuss the release of the Calamos CEF Income & Arbitrage ETF (CCEF). Geraci highlights that the release of this fund adds to the two other ETFs that the firm currently offers. Kaufman joins the conversation to give listeners an in-depth explanation of what Calamos is and its history. Geraci then asks Kaufman to explain Calamos’ ETF approach thus far.

“The way that we are approaching the ETF line is really thinking in terms of [the]category’s disruption and then innovation,” he said.

Kaufman shared that he looks at aspects of the market today that could be disrupted and brought back to the market better. The duo then explore what’s underneath the hood of the Calamos CEF Income & Arbitrage ETF (CCEF), and Kaufman shares what Calamos is trying to achieve with the recent release of this fund.