Wall Street awaits $100 bn crypto boom with Bitcoin ETFs: Report

Antic­i­pa­tion is build­ing on Wall Street as the arrival of Bit­coin exchange-trad­ed funds (ETFs) looms, herald­ing what is deemed as cryp­to’s break­through on the insti­tu­tion­al stage. Accord­ing to Bloomberg, the expect­ed green sig­nal from the US Secu­ri­ties and Exchange Com­mis­sion (SEC) for these ETFs is fuelling a fresh hype cycle, with indus­try insid­ers eye­ing a poten­tial $100 bil­lion market.

The reg­u­la­to­ry pen­du­lum, once a hin­drance, is now swing­ing favourably, paving the way for insti­tu­tion­al and retail investors to delve into the dig­i­tal cur­ren­cy space.

As the SEC gears up to poten­tial­ly approve Bit­coin ETFs by mid-Jan­u­ary or soon­er, the move is seen as a redemp­tion oppor­tu­ni­ty for dig­i­tal asset pro­po­nents. The involve­ment of heavy­weight play­ers like Black­Rock, Fideli­ty, and Invesco is like­ly to con­tribute to the growth of the spot-Bit­coin ETF market.

Bloomberg Intel­li­gence esti­mates sug­gest that, with these rep­utable play­ers on board, the mar­ket has the poten­tial to evolve into a $100 bil­lion jug­ger­naut over time.

Jeff Jan­son, a wealth advis­er man­ag­ing about $550 mil­lion, expressed his con­fi­dence in the immi­nent SEC approval. He told Bloomberg, “I feel like we are now star­ing down the gun bar­rel of the SEC final­ly deliv­er­ing approval.”

He antic­i­pates sig­nif­i­cant insti­tu­tion­al-lev­el inter­est once Bit­coin is acces­si­ble through the ETF wrap­per. This sen­ti­ment aligns with the bull­ish out­look that the involve­ment of major insti­tu­tions can trans­form the dig­i­tal asset landscape.

How­ev­er, despite the opti­mism sur­round­ing the Bit­coin ETFs, the after­math of the FTX implo­sion con­tin­ues to cast a shad­ow on the cryp­to mar­ket. The shock­waves from the indus­try’s largest exis­ten­tial cri­sis have restrained inter­est, espe­cial­ly from every­day investors.

Bit­coin, despite recent ral­lies, has not yet reached its 2021 high, and notable fig­ures in finance, like hedge fund man­ag­er Paul Tudor Jones, have main­tained a low pro­file on dig­i­tal assets. Scam inci­dents, false claims, and mar­ket volatil­i­ty have added com­plex­i­ties to the nar­ra­tive of cryp­to’s inte­gra­tion into tra­di­tion­al finance.

Bloomberg cit­ed Chuck Cumel­lo, pres­i­dent and CEO of Essex Finan­cial Ser­vices, who empha­sis­es the game-chang­ing poten­tial of a Bit­coin ETF, stat­ing it would sim­pli­fy trad­ing and make it more acces­si­ble for clients. The ETF’s intro­duc­tion is viewed as a sig­nif­i­cant devel­op­ment, offer­ing a direct and super­vi­sion-friend­ly method for insti­tu­tions to include cryp­to invest­ments in their port­fo­lios. The ETF’s appeal extends to both mil­len­ni­al investors and high-net-worth individuals.

Laila Pence, founder of Pence Wealth Man­age­ment, offers a word of cau­tion, high­light­ing the wan­ing inter­est in dig­i­tal assets among younger clients. She points out the sol­id per­for­mance of tra­di­tion­al mar­kets, ques­tion­ing the neces­si­ty of tak­ing risks in the cryp­to space when more con­ven­tion­al options are con­sid­ered safer. Pence’s per­spec­tive under­scores the diverse opin­ions with­in the finan­cial advi­so­ry land­scape regard­ing the adop­tion and poten­tial risks asso­ci­at­ed with cryptocurrency.

To some, the intro­duc­tion of Bit­coin ETFs is more than a mar­ket oppor­tu­ni­ty; it sym­bol­is­es the nor­mal­i­sa­tion of a once-dis­cred­it­ed asset class. The trans­paren­cy and liq­uid­i­ty offered by the ETF struc­ture are seen as a com­pli­ance-friend­ly avenue for insti­tu­tion­al play­ers, poten­tial­ly unlock­ing fresh lend­ing and deriv­a­tives trades. Coin­base empha­sis­es that the ETF rep­re­sents more than imme­di­ate inflows, pre­dict­ing it could reshape the mar­ket in entire­ly unprece­dent­ed ways, albeit over time.

(With inputs from Bloomberg)