Spot Bitcoin ETFs are increasingly embedding the asset in traditional investment portfolios and could provide a more durable institutional and wealth-management bid, Bloomberg ETF analyst Eric Balchunas said on Tuesday. BlackRock’s iShares Bitcoin Trust (IBIT) remains the category’s standout product, with BlackRock dominating inflows and total assets across the products nearing $100 billion in August, although flows are spreading across multiple issuers. Balchunas estimates that only around 2%–3% of IBIT inflows come from investors converting Bitcoin held through self-custody into ETF shares. He said ETFs address Bitcoin’s intermediary problem by providing access through the same infrastructure investors use for stocks and bonds, potentially making flows stickier. Balchunas also said IBIT has slightly outperformed Vanguard’s S&P 500 ETF since launch despite Bitcoin experiencing a roughly 50% drawdown. He considers an allocation of about 3% of a traditional portfolio a potential sweet spot. The broader investment case remains tied to Bitcoin’s debasement resistance and censorship resistance, with the former representing the stronger Wall Street narrative amid government debt, bond-market intervention and persistent inflation concerns.