3 three reasons why crypto investors should brace for a record quarter

Hougan says fourth-quarter flows could surpass $36 billion as advisors flock to Bitcoin ETFs amid macroeconomic and price catalysts.

Bitwise Chief Investment Officer Matt Hougan predicted a strong end to 2025 for Bitcoin Exchange Traded Funds (ETFs) and said inflows could reach record levels in the fourth quarter.

In a note to investors, Hougan outlined three key catalysts behind the expected rise, pointing to platform approvals, the broader macroeconomic environment, and BTC’s recent price momentum.

Hougan’s hot take

First on his list is the wave of institutional approvals that are now paving the way for major asset managers to offer Bitcoin ETFs to their clients. He marked Morgan Stanley’s Oct. 1 guidance, which allows its 16,000 advisors managing $2 trillion in assets, to include cryptocurrency allocations of up to 4% for risk-tolerant clients.

Wells Fargo has made a similar pivot, and the Bitwise executive suggested that companies like UBS and Merrill Lynch are likely to follow suit. While the rollout won’t happen overnight, conversations Hougan has had with advisors indicate strong pent-up demand.

The second factor is what Hougan calls the “Debasement Trade,” referring to the growing interest in assets seen as hedges against currency depreciation. Bitcoin is one of the best-performing major assets of the year, alongside gold. US monetary expansion has risen 44% since 2020 and has brought this trade into sharper focus, with major financial institutions including JPMorgan publishing reports highlighting the strategy.

Hougan argued that advisors looking to showcase strong year-end portfolio performance will likely steer clients toward BTC ETFs, which is similar to last year’s preference for high-performing tech stocks.

Bitcoin market momentum

Hougan also pointed to Bitcoin’s own market performance as a fundamental driver of the inflows. The crypto asset recently surpassed $126,000 as it broke major psychological barriers, posting a 9% gain in the first week of October alone.

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Historically, quarters marked by positive double-digit returns for BTC have coincided with billions in ETF inflows, a pattern Hougan predicts will repeat in the fourth quarter.

Hougan’s bullish outlook is supported by numbers from early in the fourth quarter, when Bitcoin ETFs raised $3.5 billion in just four trading days, catapulting YTD flows to $25.9 billion. With 64 trading days remaining, the executive predicts the sector could easily reach more than $10 billion in inflows, potentially surpassing last year’s record-breaking $36 billion.