Is the Bitwise Bitcoin ETF Still a Must-Hold in a Multi-Engine Bull Market?

The Bitcoin bull market of 2025 is no longer a speculative narrative—it is a structural shift driven by institutional demand, macroeconomic tailwinds, and the maturation of crypto infrastructure. At the heart of this evolution lies the Bitwise Bitcoin ETF (BITB), a fund that has carved a niche as a low-cost, institutional-grade vehicle for accessing Bitcoin. But as the market consolidates and new entrants emerge, is BITB still a must-hold in a diversified crypto portfolio?

Institutional Demand: The Engine Fueling the Bull Run

Bitcoin ETF inflows in Q2 2025 surged to $14 billion, a 366% increase from Q1, as institutions increasingly allocate capital to Bitcoin as a hedge against inflation and fiat devaluation. BlackRock's IBIT dominated headlines with $83 billion in AUM, but BITB's $4.88 billion in AUM and $12.7 million in Q2 inflows underscore its growing appeal. BITB's 0.25% expense ratio, coupled with a 15.20% year-to-date return, makes it a compelling alternative to older, higher-fee options like Grayscale's GBTC.

The fund's custodial security—backed by Coinbase Custody Trust Co. and administered by the Bank of New York Mellon—addresses institutional concerns about operational risk. BITB's proof of reserves (40,956 BTC held in trust) and audited transparency further reinforce its credibility. As GameStop's $500 million Bitcoin purchase and corporate treasury allocations demonstrate, Bitcoin is no longer a fringe asset but a core portfolio component for risk-aware investors.

GBTC's Performance: A Cautionary Tale

Grayscale's GBTC, once the dominant Bitcoin vehicle, now faces existential challenges. Despite a 135.2% rebound in 2025, its 1.50% expense ratio and structural inefficiencies (e.g., lack of liquidity, no dividends) have eroded its edge. BITB and other newer ETFs have outperformed GBTC in annualized returns since the latter's ETF conversion in 2024, highlighting the importance of cost efficiency in a competitive market.

While GBTC's 0.00% premium to NAV (as of July 2025) suggests market normalization, its long-term viability hinges on retaining institutional clients. BITB's minimal 0.08% premium and lower fees position it as a superior long-term play, particularly for investors prioritizing operational efficiency and regulatory clarity.

Macro Tailwinds: Bitcoin as a Systemic Hedge

Bitcoin's correlation with traditional assets has evolved. In 2025, its 0.48 correlation with the S&P 500 and inverse relationship with U.S. Treasury bonds position it as a dual-purpose asset: a high-beta equity-like exposure and a sovereign risk hedge. With global debt-to-GDP ratios near record highs and the U.S. Federal Reserve's policy uncertainty persisting, Bitcoin's role in diversified portfolios is expanding.

Network economists like Timothy Peterson argue that ETFs are outpacing Bitcoin's natural supply rate, creating a $40 billion deficit in the protocol. This scarcity dynamic, combined with macroeconomic pressures, has fueled price projections as high as $135,000 by year-end. Analysts like Kobeissi even suggest a $200,000 target if 1% of the $31 trillion institutional asset pool allocates to Bitcoin.

BITB's Strategic Value: Diversification and Risk Management

For crypto portfolios, BITB offers a unique value proposition. Its low fees, institutional-grade custodial security, and transparency make it a cornerstone for risk-adjusted returns. Historical data shows that adding Bitcoin to a 60/40 portfolio has improved risk-adjusted performance in 74% of one-year periods and 100% of three-year periods since 2014. BITB's Sharpe ratio, while volatile, reflects Bitcoin's potential as a high-conviction, long-term asset.

Moreover, BITB's inclusion in platforms like Carson Group and its expansion into European markets via Bitwise's ETC Group acquisition highlight its scalability. For investors seeking to balance Bitcoin's volatility, trend-following strategies (e.g., 50-day moving averages) can mitigate drawdowns while capturing upward momentum.

Verdict: A Must-Hold in a Multi-Engine Bull Market

The 2025 bull market is multi-faceted: driven by ETF inflows, macroeconomic shifts, and corporate adoption. While BITB is not the only Bitcoin ETF, its combination of low fees, institutional-grade security, and strategic diversification benefits makes it a must-hold for investors navigating this landscape.

However, sustainability hinges on continued inflows and macroeconomic stability. If Bitcoin's correlation with equities tightens further or if regulatory headwinds emerge, investors should reassess allocations. For now, BITB remains a compelling vehicle to capitalize on the bull run while mitigating operational and liquidity risks.

In conclusion, the Bitwise Bitcoin ETF is more than a speculative play—it is a bridge between traditional finance and the next phase of digital asset adoption. For a diversified portfolio, it offers the best of both worlds: the upside of a high-growth asset and the safeguards of institutional-grade infrastructure.