Why chances of spot bitcoin ETF went up ‘tremendously’ on false report
Bitcoin surged on Monday, October 16, hovering just below $30,000 on false reports of BlackRock (BLK) receiving SEC approval for a spot bitcoin ETF. Could this renewed enthusiasm in the crypto space hold and what does it say about the timeline of a future bitcoin ETF?
Devin Ryan, Citizens JMP Securities Director of Financial Technology Research, joins Yahoo Finance Live to discuss the likelihood of the SEC ever approving a spot bitcoin ETF.
“The expectation is that one gets through, then it’s kind of essentially check the boxes to be able to be approved,” Ryan says on making the case for future approvals. “That’s kind of this dynamic on unlocking significant capital that really has just not been participating in the space yet.”
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Video Transcript
AKIKO FUJITA: Bitcoin is now hovering around that $28,000 mark after briefly spiking above $30,000. That came on false reports that BlackRock’s ETF had been approved by the SEC, but our next guest says this could provide a glimpse of an initial reaction to this one day become true. Devin Ryan, Citizens JMP Securities Director of Financial Technology research joins us now. Devin, that points to a really bullish case for crypto. How are you looking at the moves on what was a false report, but the excitement that could come with an official approval?
DEVIN RYAN: Hey, good morning, Akiko. Yeah, I think that what we saw yesterday was kind of a little glimmer into a reaction that you might see, and probably over time the reaction would be much more significant, which I can talk about. Essentially, what’s happening here is the SEC lost its court case against Grayscale. They had until the end of Friday to appeal it, they didn’t, and so I think the probability of a spot ETF approval has gone up pretty tremendously.
And so, you know, I think yesterday what was clearly false news, but the reality is that the probability is quite high, and if there is an approval, which, again, we think will likely happen over time, you’re going to see potentially tens or hundreds of billions of dollars of capital come in over the long term. If you look at just the sponsors of these ETFs right now, it adds up to nearly $20 trillion of client assets that they are managing, and so therefore just a small allocation could really move the needle.
RACHELLE AKUFFO: So, Devin, I mean, a lot of us have been watching some of– watching this space, and from what we understand, if they were to approve a spot ETF, it should be perhaps a group of them that all get through at once versus sort of one or it being piecemeal. Is that still the expectation here?
DEVIN RYAN: Well, I think, yes, the expectation is that if one gets through, then it’s kind of essentially check the boxes to be able to be approved, and so therefore others will be approved or others could make changes to essentially be approved, and so the expectation is that what is now kind of in the queue would get approved once the first one does.
And so that’s kind of this dynamic of unlocking significant capital that really has just not been participating in the space yet. If you think about the wealth management industry, where ETFs are really a tool that are utilized, you know, I think people are much more comfortable with an ETF structure than potentially going out and buying digital assets individually, and so there’s bigger implications than that, but that’s essentially it at a high level.