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Wednesday, April 21, 2021

Browne, Hougan, and Wood Ponder the Future of ETFs

Reported by Neil Anderson, Managing Editor

2021 could be the first year of more than $1 trillion in net ETF inflows.

Reginald Matthew "Reggie" Browne
GTS
Principal
So said Matt Hougan, chief investment officer of Bitwise, last night in his post-victory interview after winning the lifetime achievement award at the eighth annual ETF.com Awards. Other featured speakers at the online celebration included Reggie Browne (principal at GTS and the prior lifetime achievement award winner), Cathie Wood (CEO and CIO of Ark, which won "ETF of the Year" and "ETF Issuer of the Year" last night), and the Winklevoss twins of Facebook and now bitcoin fame. The festivities were emceed by Nic Harcourt (firestarter at !Spark Network) and Drew Voros (editor-in-chief of ETF.com).

Voros interviewed Hougan (who years ago served as CEO of ETF.com), who talked about the long-running efforts to teach people about ETFs and what they can do.

"You have to get people excited," Hougan says.

Looking ahead, Hougan offered some big predictions about ETFs' future.

"People undersell where we are in the ETF evolution. It's still relatively early," Hougan said. "This industry's going to double, and then it's going to double again."

"We will eclipse mutual funds for assets" by 2026 or 2027, Hougan added.

Earlier in the event, Bob Pisani, senior markets correspondent at CNBC, interviewed Browne about his 37-year-career. Browne, known as the "godfather of ETFs," predicted that ETF usage will double over the next decade and smiled favorably on cryptocurrency ETFs

"Single commodity ETFs are coming, and you'll see more of them soon," Browne added.

Later, Seema Mody, global markets reporter for CNBC, interview Cameron Winklevoss and Tyler Winklevoss, co-founders of Gemini. Tyler Winklevoss noted that the SEC's new chair is a bitcoin enthusiast. And Cameron Winklevoss predicted that we could see bitcoin ETFs debut by the end of the year.

"Over time, we're going to see a lot of innovation in this space," Cameron Winklevoss said. "Bitcoin ETFs are the first step."

Wood, in an interview with ETF.com managing editor Cinthia Murphy, also talked about the rise of bitcoin and other cryptocurrencies.

"We have a new asset class here, for the first time since the 1600s," Murphy said, referencing when the first stocks were issued. "When I saw MassMutual put $100 million into bitcoin in its general account, that is the shot heard 'round the world!"

Wood likened the recent IPO of Coinbase to the 1995 IPO of Netscape.

"Microsoft heard that shot heard 'round the world," Wood said. "I do not see financial institutions around the world moving quickly to address this competition. There's going to be a lot of creative destruction."

Wood also talked about how few firms are treading an active ETF path like Ark (without using some of the semi-transparent ETF structures) and about how her firm is "radically transparent" about what they do. She sees that as a ticket for other asset managers, as it can lead to a "viral networking effect."

Andrew Lusk contributed to this article. 

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