WisdomTree’s BTC ETF Faces Slow Inflows

WisdomTree aims to make its consumer app available nationwide, emphasizing its unique features for holding digital assets.

Despite WisdomTree trailing other fund issuers regarding bitcoin ETF inflows, the company’s executives anticipate an increase as a greater number of financial advisers invest in these products.

Jarrett Lilien, chief operating officer of the company, emphasized on a Friday earnings call that the firm’s consumer app provides a superior method of holding bitcoin compared to the ETF wrapper.

By the end of 2023, WisdomTree had amassed $100 billion in assets under management, a new high for the firm. Bloomberg Intelligence data indicates that the US spot bitcoin fund it debuted alongside nine competitors on January 11 has received approximately $10 million in inflows over its first 15 trading days.

The inflow total is the smallest among the nine spot bitcoin ETFs in the United States that have generated assets thus far. This excludes the Bitcoin Trust ETF (GBTC) of Grayscale Investments, which had approximately $28 billion in assets at the time of its conversion to an ETF and has since experienced outflows exceeding $5 billion.

As of Thursday, the funds managed by BlackRock and Fidelity have recorded the highest inflows, amounting to approximately $2.5 billion and $3 billion, respectively. Notwithstanding the substantial outflows of GBTC, the ten funds have accumulated an estimated net inflow of $1.5 billion.

Lilien expressed confidence in the organization’s capacity and historical performance to expand [assets under management] on Friday during the company’s earnings call.

“However, this does require time, particularly in our model, as these products are not yet available on a significant number of adviser platforms, where the majority of our flows are anticipated to occur.”

In an email, the chief operating officer remarked that the firm had previously referred to the wealth management channel as its “primary distribution channel for US ETFs” and that efforts would be made to educate partners on the asset class and the new company product.

WisdomTree’s Consumer App

Following his discussion on the sluggish expansion of the firm’s bitcoin fund in the United States, Lilien contended that the utility of bitcoin is more suitable for implementation in WisdomTree’s consumer application than in an exchange-traded fund (ETF).

A year ago, the asset manager introduced the WisdomTree Prime application. It provides users access to various digital funds, including dollar and gold tokens, bitcoin (BTC), and ether (ETH), with shared ownership records maintained on the Stellar or Ethereum blockchains.

On Friday, executives announced that the company intends to make the application available to the entire US population by the end of the year. Currently, the application is accessible to users in 38 states.

“In addition to the ability to possess bitcoin alongside other digital assets, you also receive payments and peer-to-peer functionality that are not available with exchange-traded funds” (ETFs), Lilien explained.