Since launching on January 11, Bitcoin ETFs have experienced net inflows exceeding $11 billion, including a $1 billion inflow on Tuesday alone. Now holding over 800,000 BTC, the ETFs have shattered most people’s expectations, and left onlookers wondering who is buying them, why, and for how long.

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Since launching on January 11, Bitcoin ETFs have experienced net inflows exceeding $11 billion, including a $1 billion inflow on Tuesday alone. Now holding over 800,000 BTC, the ETFs have shattered most people’s expectations, and left onlookers wondering who is buying them, why, and for how long.

So far, many of Hougan’s discussions have been with family offices and financial advisors – who he said last month are some of the primary drivers behind ETF demand right now.

Major wirehouses and platforms, he said, are still “plugging in” to the new products as they work through due diligence procedures and will finish the process within the next few months. Regarding their views on Bitcoin itself, he claims the “classic FUD points” are being whittled away.

“People no longer ask about criminal use, Tether, FTX, Binance, or the government banning Bitcoin,” said Hougan, referencing major media concerns last year regarding stablecoin fraud, crypto theft, and sanctions violations.

Meanwhile, concerns about Bitcoin’s environmental impact are “fading but still exist,” while confusion around Bitcoin’s “lack of cash flows” is still prominent. The latter concern is largely believed to explain Vanguard’s refusal to enable access to Bitcoin ETFs for its clients.

The National Debt Problem

However, some investors are intrigued by Bitcoin as a potential hedge against rising US debt levels – now exceeding $34.5 trillion. Hougan explained:

“Many advisors have clients who are worried about the U.S. fiscal situation, and are using bitcoin as a release valve for that concern. I think the elections may be a catalyst to bring this concern to the forefront of people’s minds.”

Former Coinbase CTO Balaji Srinivasan predicted last week that overwhelming debt will force the U.S. government to confiscate its citizens’ assets and that Bitcoin would shield them from that overreach.

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