Industry executives and analysts believe that the Securities and Exchange Commission’s landmark decision Wednesday to approve bitcoin spot ETFs will allow more investors to enter the market.
According to a filing on Wednesday, the regulator approved such proposals from BlackRock, Fidelity and Grayscale as well as VanEck and Valkyrie. It also cleared one by Ark Invest, 21Shares and WisdomTree.
BlackRock Grayscale and Fidelity said in a statement that their funds would begin trading on Thursday.
Reactions from fund executives
Dominik Rohe stated in a press release on Wednesday that BlackRock’s iShares Bitcoin Trust is backed by the iShares Bitcoin Trust. “investors can access bitcoin in a cost-effective and convenient way.”
Matt Hougan, Chief Investment Officer at Bitwise, said the following in an X-post: “We’re so back.”
“We were and remain excited at the prospect of democratizing access to this asset through a U.S. regulated investment vehicle,” Grayscale’s CEO Michael Sonnenshein made the following statement.
Cynthia Lo Bessette said, in a press release, that Fidelity has been evaluating the possibility of a spot Bitcoin ETF for some time. The firm believes it would provide a good way to invest.
“Fidelity has engaged in constructive dialogue with the SEC for years, and the affirmation of this approval signals positive momentum for the industry, and increased choice for investors who want to engage with digital assets,” She also added.
Roger Bayston is head of digital asset at Franklin Templeton. He told Blockworks, he’s a fan. “encouraged” By the SEC’s decision. The SEC’s decision simplifies the allocation of crypto to US investors, he said.
“We feel that we are well positioned as a firm to leverage our in-depth knowledge of blockchain ecosystems to introduce products like the Franklin Bitcoin ETF (EZBC) that serve to further the understanding and accessibility of digital assets within the broader investing community,” Bayston said.
Leah Wald, CEO of Valkyrie, told Blockworks that the company is “locked and loaded.”
“There’s still a lot that I think we’re testing out,” When asked about the potential of trading starting on Thursday, she replied: “I’m not sure about the other issuers but Valkyrie is meticulous in ensuring our trading operations and every part of operations is seamless.”
Watchers of the industry assess its significance
Analysts and executive predict that approval of bitcoin spot ETFs will likely bring in a wave of traditional investors to the cryptomarket.
Spencer Hallarn said the decision opens the crypto-space to a large pool of capital. “walled off.”
“While on an individual level BTC and crypto has been quite accessible for years, getting exposure in an institutional construct without the prohibitive roll costs of futures-based products that can be custodied alongside the entirety of folks’ portfolios is important and represents a major step forward for the space,” Hallarn added.
The exchange-traded funds (ETFs) are widely used both by institutional and retail investors. ETF.com reports that there are approximately 2,000 ETFs traded in the US, with assets managed totaling $6.4 trillion.
In a survey conducted by Financial Planning Association and Journal of Financial Planning in June, more than 90 percent of financial advisers said they use ETFs or recommend them. A recent Bitwise/VettaFi survey found that nearly 90% of financial advisors are waiting for a US-based spot Bitcoin ETF before they buy BTC.
Steven Schoenfeld said that he believed family offices and wealth managers as well as small institutions which haven’t yet invested in BTC will be comforted by the ETF. He pointed out that US financial advisers oversee more than 30 trillion dollars in assets.
“If just 1% of this amount were allocated to a Bitcoin ETF, it would ultimately translate to $300 billion invested in bitcoin,” Schoenfeld note. “This substantial influx of capital could significantly impact bitcoin’s market cap, liquidity, and overall stability.”
What is the impact of price?
Joel Kruger, the LMAX Group’s market strategist, said that in December, the approval of bitcoin spot ETFs may be possible. “a rare buy the rumor, buy the fact event.” He said that an approval would trigger a 10% to 15% rally, fuelled by the sidelined capital.
Price of Bitcoin at the time was roughly $46,450, as of 5:30 pm ET — up about 1.2% from an hour prior.
Charles Yu, research associate for Galaxy Digital in an October article, wrote that Bitcoin’s value could grow by 74% over the next 12 months. It was based in part on his estimates of flow: $14.4 Billion in the first 12 months.
“The ripple effects of a spot bitcoin ETF could lead to a recalibration of market dynamics, aligning them closer to traditional financial markets, yet retaining the distinct characteristics of the crypto world,” Sheila Warren is the CEO of Crypto Council for Innovation.
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