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The CEO of the world’s largest crypto index fund manager Bitwise says that $50 billion could flow into a spot Bitcoin (BTC) exchange-traded fund (ETF) within years of launching.

In a new interview on the Unchained Podcast, Matt Hougan says that in the first year of a spot BTC ETF, about $5 billion could flow into the product.

“The record in ETF land, excluding ETFs that bring their own assets, is about $5 billion. I think $4 or $5 billion. I think something like that is totally reasonable in year one.”

Hougan also believes that a spot BTC ETF could attract about $50 billion in the first five years.

“Our estimate is something like $50 billion in the first five years, which feels reasonable to me. That’s of course not a guarantee. It could go on either side. We don’t have any view on the specifics, but if you look at other markets, Bitcoin ETFs are like 1% of the market when they’re mature.

And the US ETF market is $7 trillion. So take 1% of that, and you have $70 billion. There’s already $20 billion in GBTC (Grayscale Bitcoin Trust). So that leaves $50 billion. That’s the math that gets you to that point. Could it be more? Of course. Could the price go up and multiply that? Of course. But it’s a lot of money. It’s net new demand at a time of decreasing supply because of the halving and that’s a pretty exciting combination.”

Hougan says that a spot BTC ETF will likely increase the value of Bitcoin by increasing demand, but how much is unclear.

“I’ve seen a study by [Cathie Wood’s] ARK that puts a 15x multiplier. I don’t endorse that study. But that’s one particular approach. My view is we don’t have a good view on the impact of new demand on a completely supply-inelastic commodity. And I think it’s probably not linear. It probably has an unusually shaped relationship.

But I think if investors step back and think about the next three years in Bitcoin you can keep it relatively simple, which is there’s this new source of demand in the ETF wrapper, and there’s this decreased supply from the Bitcoin halving.

And of course, no market is that simple, and anything can happen and there are huge risks, but that is an overarching framework to think about Bitcoin for the next couple of years.”

Bitcoin is trading for $34,594 at time of writing.

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