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An XRP ETF Would Be a "Huge, Huge Product" - Bitwise CEO Hunter Horsley | Markets Outlook
00:13:10
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- [00:00]
Hunter Horsley
Traditional financial services and crypto are finally coming together. The space has been around for so long and they've almost been two separate worlds. And I think here at Swell and in general in 2025, they're connecting and we see that in our business a bitwise too. And I think it's one of the most exciting years for the space.
- [00:25]
CoinDesk Host
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- [01:28]
Hunter Horsley
How you doing?
- [01:29]
CoinDesk Host
We're doing absolutely splendid. We're having so much fun at the desk. We are very happy to have you join us here. Talk to us about what you've experienced so far, what's the energy been like? What kind of conversations have you been having?
- [01:41]
Hunter Horsley
It's incredible. You know, I think it's indicative of the broader story this year, which is traditional financial services and crypto are finally coming together. The space has been around for so long and they've almost been two separate worlds. And I think you're at swell and in general in 2025, they're connecting and we see that in our business a bit wise too. And I think it's one of the most exciting years for the space.
- [02:05]
CoinDesk Analyst
You have been, your firm has been one of the great explainers and evangelists, but also, you know, the firm that's figured out a lot of the plumbing to get product out even before ETFs. And now things are changing a lot. So, you know, what do you expect investors to do when all these ETFs are out there. Are they going to trade them? Are they going to hold them? What are they going to do? Are they going to put them in retirement accounts?
- [02:29]
Hunter Horsley
Accounts?
- [02:30]
CoinDesk Analyst
What's your best case for investor behavior?
- [02:32]
Hunter Horsley
Sure. Yeah. So bitwise today manages 15, $16 billion. We have 30 different investment solutions. We have ETFs in the US, ETPs in Europe. We run hedge fund strategies, private solutions, we stake directly for clients. We do a lot of things and have a bunch of surface area. We have a data point on that because last week we launched the first Solana staking etf. The ticker is B Soul and it's gathered yesterday it took in about $70 million and it's gathered over $400 million in five business days. So what we've heard anecdotally is there are advisors who bought it, a few faster moving advisors, there's hedge funds and institutional asset managers already started to trade it, and individuals who are using the benefit of an etf, allowing them to access it in retirement accounts and other types of accounts. So I think that there's still a huge amount of capital that has not been able to access many assets. If we're fortunate to be able to launch an XRP etf, I think it'll be a similar story. Having said that, I don't think that investors are going to have a portfolio of 23 different digital assets or digital asset piece. So I think over maybe the 6 to 12 month time frame, more investors will turn to index solutions. The Bitwise 10 crypto index fund tickers, BTW on that is the largest index fund in the world and a portfolio of the top 10 assets. I think that may become more in focus as a solution for not having to select specific exposures. But right now we see, I mean B Soul was the largest ETF launch of 2025 across every asset class out of 850 products. So I think there's still a lot of demand in traditional capital markets that haven't been able to tap into exposures.
- [04:13]
CoinDesk Host
It's kind of a wild story. I mean, did you, did you predict that B Sol would perform so well and dig a little bit deeper? What is this, what is this telling you about future products to come?
- [04:24]
Hunter Horsley
Yeah, well we've been in the space for seven years or maybe eight now, so you know, there's always, always risk in trying to predict any given week or moment. I would say that we're thrilled with the response. And there were also other crypto asset ETFs that launched last week Litecoin Hedera and I think they took in less than $10 million. So to some extent these ETFs are vehicles for getting exposure to an underlying asset and inflows in demand are going to be related to the extent to which investors want exposure to that underlying asset. So Solana I think has an incredible story, sort of perfect for this moment where tokenization is underway, stablecoins are underway and being a platform for capital markets coming on chain is a very useful role for Solana to play. And so I wasn't surprised that there'd be demand. I think being the biggest ETF launch of 2025 is remarkable and certainly almost half a billion dollars of inflows in five business days is significant for an e.
- [05:58]
CoinDesk Host
Coindesk. Bitcoin Treasury Month is brought to you by Genius Group, a bitcoin treasury company listed on the New York Stock Exchange under the ticker GNS. Genius is on its way to hodling 10,000 Bitcoin in its treasury with while educating the world on a bitcoin first future Genius has launched the Genius Academy with courses from the likes of Saifa, Diya Namus, author of the Bitcoin Standard, Natalie Brunel and many more. Start your genius learning journey for free today at GeniusAcademy AI and earn Bitcoin backed gems. Genius Group Genius isn't measured in iq, it's measured in bitcoin. Looking for a faster, cheaper way to move money worldwide. Owling, now listed on the NASDAQ under the ticker symbol OWLS, is building the rails for stablecoin payments. With OwlPay, you can seamlessly convert fiat currency to stablecoins, send money as easily as a text message and on or off ramp globally. Learn more about Owlting@owlting.com one of the.
- [06:49]
CoinDesk Analyst
Themes we've been covering this morning is how volatility has come down, especially in bitcoin, but in many other assets as well. And I guess there's, there's a supply curve and a demand curve there, right? We've always wanted lower volatility to bring in more investors who were scared of high volatility. But of course a lot of people who get into crypto, especially the ETF side, kind of like that volatility because it, it's on the right side of the, of the distribution skew. Solana is a good name to talk about. It's still pretty volatile. It's still pretty spicy, you know. What do you predict Solana's volatility might look like a year from now and will that make it less interesting or that just convert the investor base which is interested in holding it.
- [07:29]
Hunter Horsley
I think for assets outside of Bitcoin, you know, Bitcoin volatility is now around 35 or something. Something along credible, right?
- [07:36]
CoinDesk Analyst
Yeah.
- [07:36]
Hunter Horsley
Which, which is remarkable.
- [07:37]
CoinDesk Analyst
It's less the NASDAQ stock.
- [07:38]
Hunter Horsley
Less, yeah, exactly. Less than certain names in the, in the mag 7. I think that the world is ingesting a consensus understanding of what Bitcoin is as digital gold, a non sovereign monetary instrument. And volatility in some ways represents the extent to which investors don't agree on what something is or what it's worth. And I think as Bitcoin is continuing this journey of really building a consensus, that doesn't mean that everyone will want it, but if they sort of have a shared understanding of what it is and how to think about what it's worth, then the price ranges get tighter. Right. I think for the other large assets like xrp, like Solana, Ethereum, I think that we'll continue to have volatility for, for the next 12, 18 months. Because the thing that sometimes in crypto people can forget is investors are busy. You know, there's AI going on, there's what's happening with Macro. The government, they want to take a family vacation potentially they have their own clients and so they're interested in and engaging with the space, but they're not able to think about it multiple hours every day. And so I think that there's more thought development that will need to take place with Solana and XRP and Etherium before consensus emerges on those assets. So I think they'll continue to be volatile for some time to come.
- [08:58]
CoinDesk Host
Do you think an XRP ETF would outperform the sole one that we just spoke about?
- [09:04]
Hunter Horsley
I think it'll be a huge, a huge product. There's a ton of interest in XRP and you know, my colleague Matt Hogan, our CIO likes to say that the death of an ETF is apathy and apathy is certainly not one of the elements of xrp. There's a lot of energy and interest and enthusiasm. So I think, you know, there's 100 plus trillion dollars that live on traditional rails and more and more of that is migrating on chain. But nevertheless there's $100 trillion there. An ETF is often the first time that much of those assets can tap into exposure to an asset. And I think if they have the opportunity to have exposure to and trade xrp, it'll, it'll be a very useful.
- [09:49]
CoinDesk Analyst
And High demand product 2024 market was dominated by availability and narrative and education by Bitcoin and you know, people who made their first foray into digital assets, let's say the advisor class, it was pretty obvious what they were going to do first. Now, with a proliferation, as you mentioned, of course, you won't be surprised here. We agree on the idea that that indices are a good way to contain the whole asset class as ones and provide allocation. This idea that holding Bitcoin only is more of an active choice. Right. Do you find your distributors and people who talk to your clients find that that's a sticking point. Right. They're comfortable with their bitcoin. Bitcoin is often outperformed because it's less volatile and it just, you know, gets a certain amount of lift. But it's an active choice now, right. With all these other things and it misses a lot of the growth opportunities. How much time does Matt and you know, how much time do both of you spend on trying to almost dislodge the, or at least iterate on the progress that the industry made last year?
- [10:50]
Hunter Horsley
In my experience over the years, many investors have a historical predisposition and it's very hard to redirect that in crypto. So if it's an individual who does security selection and is a single name conviction investor, maybe they, they like Nvidia, but they don't own any other semiconductor company, or they like Palantir, but they don't own any other Defense prime or AI company, then they're going to have that approach to crypto most likely. Conversely, if they historically are an asset allocator or use diversified instruments, that's where they're going to wind up in this space too. So I think there might be, you know, a few swings here or there, but by and large I think that the diversified story is going to have a huge resonance because that is one of the most popular ways to invest in the asset class. Having said that, I do think that bitcoin is one of the biggest opportunities, the opportunities that people are most comfortable with. So I don't think bitcoin's role will diminish. I think actually what will happen is people diversify, but their overall exposure and allocation to the space will also increase. And in BITW, the bill's 10, for instance, it's 60, 70% of the portfolio. So I think bitcoin has a huge journey ahead. But I do think to your point, that indexes are going to become a lot more popular.
- [12:03]
CoinDesk Host
Bitcoin is at around $104,000 this morning. Is Bitwise's $200,000 prediction projection by the end of the year still in play?
- [12:12]
Hunter Horsley
I'd have to. I'd have to ask our cio. I suspect something directionally like that is true. I think there's been a rotation. We have wide range of clients from sovereign wealth funds, banks, warehouses, financial advisors, hedge funds, and crypto natives who have a lot of assets. I think a number of crypto natives have taken some principal off, sold some of their bitcoin at above 100,000. So I think that that's the story here. But the story with the rest is, for the first time, you know, we have clients who are making 2, 3, 4% model allocations in Q3. Q3 was the biggest quarter for our distribution team in history. So the storyline we see for new investors coming into the space is that demand has never been more vibrant. The way that that plays out day to day in terms of the bids and the asks is anyone's guess, but I think we're going higher.
- [13:02]
CoinDesk Host
Hunter, thanks so much for joining us at the desk. We hope you enjoy the rest of the conference.
- [13:05]
Hunter Horsley
Thank you. Thank you. My pleasure.