The Push for Crypto ETFs in the U.S

For almost a decade now, asset managers have been applying for Bitcoin ETFs at the SEC, but to no avail. However, this year came beaming with hope after the agency confirmed the approval of eleven products from BlackRock, Fidelity and ARK Investments.

For any serious investor, the importance of keeping up to date with such advancements can never be overstated. For instance, during this time alone, Bitcoin’s price spiked by over $1,000. So, you may want to always stay updated about the value of BTC to USD from time to time, as it can change rapidly.

How were the ETFs to operate?

NASDAQ, NYSE and the CBOE are to list the ETFs while custodians hold the assets. For investors who might not prefer buying actual bitcoin, this launch opens the door to crypto. The good side of these products is that you can invest in assets without necessarily buying the assets by yourself. SPDR Gold Shares, for instance, ensure you can invest in gold without seeking where to store a bar or safeguard it. And if you are looking to trade on stock exchanges, ETFs are more seamless.

Approving these funds was a major win for companies like BlackRock, especially after Bitcoin had experienced such a tumultuous moment for the past two years. As you might know, the price went to as low as $16,000 in 2022 after a popular crypto exchange platform was declared bankrupt. Miraculously, just a few hours after the SEC’s announcement, the price rose to $46,500.

If analysis means anything, Standard Chartered analysts estimated that the funds could welcome $50bn to $100bn in 2024, possibly raising the price to highs of $100,000. Other analysts projected that it could take up to five years or more to inject $55bn. As if that’s not enough, several analysts added that ETFs might possibly result in broader use of crypto by many more people and thus, stabilizing its prices.

What advantages can investors enjoy?

Accessibility is a crucial consideration for investors, and this approval poses a great shift, especially for retail investors. If you wanted to invest in the past, you’d need to navigate crypto exchanges. This, however, was a great undoing if you didn’t have sufficient knowledge about the crypto industry.

You’d be required to work your way through the complexities of trading pairs, order types, and so on. On the contrary, ETFs allow you to trade using traditional brokerage accounts, just like you’d do with other stocks.

Have you ever wanted to diversify your portfolio by including alternative options like Bitcoin? It can be quite a task, especially if you have allocated some of your portfolio to assets like stocks – Bitcoin’s correlation with traditional assets is quite low. Its price movements may not always be in agreement with those of stocks.

In an interview with CNBC, Timo Lehes, a co-founder of Swarm Market, a blockchain firm, agreed to this, stating that US investors could now take advantage of the funds to hold cryptocurrencies in their brokerage accounts, which wasn’t possible before.

He went on to add that ETFs had the potential to increase capital inflows into the market, which is already happening. A recent Bloomberg report revealed that there were about US$438 million of inflows within two trading sessions.

Bitcoin EFTs can allow you to access Bitcoin’s price movements without directly purchasing and holding the digital currency yourself. In a world where cybersecurity concerns have become rampant, such possibilities can help ensure you operate in a more secure environment. And for those having trouble distinguishing between hot and cold wallets, EFTs has you covered. All you need to do is buy an ETF from one of the available regulated asset managers.

Spot Ethereum ETFs’ Launch

Unlike Bitcoin ETFs where issuers had time to prepare for their approval, the authorization of Ether’s ETFs came unexpectedly. The approval was met with a significant spike in Ether’s price after it had performed badly in the last year.

It’s no surprise that there was such excitement, especially after reputable managers like BlackRock and Fidelity were involved in the process. Most experts believe that their participation boosted the confidence of investors who were initially skeptical about cryptocurrencies.

What do you think investors can do with Ethereum after Bitcoin hit its highest price just three months after the SEC’s approval of Bitcoin EFTs? More might be drawn to invest. Right? Plus, given that Ethereum comes second to Bitcoin in terms of market cap, some experts have projected the industry might see substantial inflows.

Standard chartered projected inflows of anywhere between $15 and $45 billion within the first year while JPMorgan anticipates $3 billion, which may double if staking is allowed in the future.

According to SYGNUM, there could be higher demand for actual Ether in the coming days as the launched Ether ETFs did not offer staking yields. Investors might, therefore, be prompted to move funds from products like Graysclase’s Trust, which might positively affect Ethereum’s price.

Parting words

For a long time now, crypto ETFs have been a matter of discussion not only in the US economy but in the rest of the world as well. And since the SEC approved them early this year, a lot has changed within the crypto industry. We have witnessed inflows increasing as more investors are drawn to the industry.

Recently, the SEC approved Ethereum ETFs, which have also welcomed a lot of discussions. Looking ahead into the future, such approvals might stir the involvement of many more investors. Who knows?