As the hope for a Bitcoin spot ETF continues to rise, several experts have aired their opinions. The most recent are coming from crypto proponents who believe that a Bitcoin ETF will be good not just for Bitcoin but the entire crypto market.
They believe that Bitcoin will see a lot more awareness and adoption if a spot ETF is approved for the asset. According to co-founder and CEO of Bybit Ben Zhou, an ETF is imminent since big players like BlackRock are now involved.
“The bitcoin ETF has been a long time coming,” Zhou, said in emailed comments to The Block. “But now, with BlackRock and other [traditional finance] juggernauts in the mix, the odds of approval are higher than ever. If approved, the effects will permeate the entire crypto market, bringing not only new money but also a new sense of confidence.”
He also said that the approval will benefit the wider industry, being like a watershed effect. However, he said it is not required for the industry’s growth, as institutions need the ETF more than bitcoin does.
“The last two years have proven that you can throw pretty much anything at bitcoin, including bankruptcies, hostile regulation, and a banking crisis, and it still outperforms pretty much any asset on Earth,” he said.
Adding Billions to the Industry
ZHou’s position has been reaffirmed by Coinbase head of institutional research, David Duong.
In a November outlook report, Duong stated that a spot Bitcoin ETF will have significant effect because it will open up an opportunity for the wealth management community and could be the foundation for further financial products.
“In the long run, this means spot bitcoin ETFs could add billions of dollars to the total crypto market cap as well as spark new potential investments for the asset class. While this will take time, we expect ETFs to lay the foundation for a more regulated environment, greater inclusion and a material growth in demand,” Duong said.
He however admitted that some of the effects may take a while to play out, such as banks and broker-dealers placing restrictions on how much can be allocated to such products in the short term.
Similarly, managing partner at Cinneamhain Ventures Adam Cochran said that more emphasis is being placed on the short-term impact of a Bitcoin spot ETF compared to what could be the long-term impact.
“A bitcoin ETF’s biggest change is in its legitimacy for pension funds, RIAs, mutual funds, and other conservative funds informally,” he said. “While a few funds and advisors have regulations that would prevent them from pushing their clients to an OTC asset like GBTC, many have internal risk control policies that would prevent it. It was the same with gold back in the day. But, once it had a legitimate ETF, properly custodied and settled, and managed by the likes of BlackRock, it became legitimate for these funds and advisors to push it.”
SEC Decision
The securities and exchange commission (SEC) has delayed decisions on the many Bitcoin ETF proposals submitted to it in 2023.
However, analysts are confident that the approval could come in Q1 2024, and possibly early January because it is the deadline for decision on some of the applications.
It remains to be seen whether there will be multiple approvals as predicted or if there will be any at all.
