WisdomTree exec downplays firm’s slow bitcoin ETF launch

Despite WisdomTree lagging behind other fund issuers in terms of bitcoin ETF inflows, executives said they expect a boost as more financial advisers allocate to such products.

On a Friday earnings call, the company’s Chief Operating Officer Jarrett Lilien emphasized that the firm’s consumer app offers a better way to hold bitcoin than does the ETF wrapper.

WisdomTree hit $100 billion in assets under management at the end of 2023, marking a record for the firm. But the US spot bitcoin fund it launched on Jan. 11 alongside nine competitors has seen about $10 million of inflows in the first 15 trading days, Bloomberg Intelligence data shows.

The inflow total is the lowest of the nine US spot bitcoin ETFs that have brought in assets so far. That excludes Grayscale Investments’ Bitcoin Trust ETF (GBTC), which had about $28 billion in assets when it converted to an ETF and has seen more than $5 billion in outflows since.

Funds by BlackRock and Fidelity have led the pack with their inflows amounting to about $3 billion and $2.5 billion, respectively, as of Thursday. Despite the heavy GBTC outflows, the 10 funds have collectively tallied about $1.5 billion of net inflows.

“We’re confident in our ability and our track record in growing [assets under management],” Lilien said during the company’s earnings call Friday. “That said, it does take time, especially in our model, because these products are not yet available on many adviser platforms, which is where we would expect to see most of our flows.”

The chief operating officer previously called the wealth management channel the firm’s “primary distribution channel for US ETFs,” in an email to Blockworks — noting it would work to educate its partners on the asset class and the new WisdomTree product.

After addressing the slow growth of the firm’s US bitcoin fund, Lilien argued that the use case for bitcoin is better within WisdomTree’s consumer app than it is in an ETF.

The asset manager launched its WisdomTree Prime app last year. It offers users access to a range of digital funds — with share ownership records kept on the Stellar or Ethereum blockchains — as well as dollar and gold tokens, bitcoin (BTC) and ether (ETH).

Executives said Friday that WisdomTree aims to make the app — currently available to users in 38 US states — accessible to the country’s whole population later this year.

“Not only can you hold bitcoin together with other digital assets, but you also get added utility in the form of payments and peer-to-peer functionality that doesn’t come with an ETF,” Lilien said.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.