Who Would Buy Bitcoin ETF If Approved? Analyst Survey Reveals

Needham analyst John Todaro had a Buy rating on Coinbase Global, Inc COIN with a price target of $160. Todaro had a Hold rating on Robinhood Markets, Inc HOOD.

The analyst surveyed over 20 financial and wealth advisors (RIAs), 75 Coinbase users, and over 200 individuals to determine who would buy a bitcoin ETF if approved and whether they would prefer bitcoin exposure via an ETF, bitcoin-linked stocks, trusts, or buying bitcoin directly on a crypto platform such as Coinbase and Robinhood.

Todaro's survey results indicate that RIAs currently have limited bitcoin offerings for their clients; the majority answered their current bitcoin strategy is to guide clients to buy directly via crypto exchange (25%), crypto stocks (15%), or GBTC (10%), but most would favor an ETF if one existed, the majority of advisors expect 5-10% of their clients to own a bitcoin ETF is available in 2024 and 2025. 

Advisors are seeing mostly disinterest from clients around bitcoin and an ETF, but nearly all expect interest to pick up if bitcoin prices continue to increase.

Todaro's survey results found that anyone who has not already purchased Bitcoin is unlikely to buy a Bitcoin ETF. Only 11% of respondents who have not previously owned bitcoin described themselves as very likely or somewhat likely to buy a bitcoin ETF. 

Todaro's results indicate that an ETF launch is unlikely to bring in more capital flows unless this coincides with higher bitcoin prices/and other engagements, which spurs greater retail interest in the asset.

Among individuals who have owned bitcoin, respondents slightly preferred to buy bitcoin on a crypto exchange/platform than a prospective ETF through an equity brokerage, although this is age-dependent. 

40% would choose to purchase an ETF, while 49% preferred using a crypto platform, which suggests that an ETF will unlikely cannibalize COIN's higher-margin trading business.

Price Actions: COIN shares traded higher by 5.56% at $147.30 on the last check Wednesday. HOOD shares traded higher by 2.45% at $11.92.