The buzz around an imminent Bitcoin ETF continues, with speculation of a January launch. The optimism, alongside expectations that central banks have finished raising interest rates, has driven the price of Bitcoin up to its highest level since the Terra crash of May 2022.
Software developer Microstrategy is the largest corporate holder of Bitcoin and boosted its holdings recently, buying some 16,130 Bitcoins, worth around $610m at current prices.
“We believe that Bitcoin ETFs are an imminent inevitability, and this would help drive crypto prices and mass adoption,” Nigel Green, CEO, deVere Group, said. “Should SEC approval happen, it would be a landmark moment for Bitcoin. The approval by the financial regulator of the world’s largest economy of this spot ETF would show that Bitcoin is, without any question, part of the global mainstream financial system.”
Spot ETFs invest directly in underlying assets, typically stocks or bonds, at the current market price (spot price). They aim to replicate the performance of a specific index or asset class by holding a portfolio of the actual securities that make up the index.
Blackrock ETFs
BlackRock, alongside WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise and Valkyrie Digital Assets, have published Bitcoin ETF applications waiting to be approved by the SEC.
The $9 trillion asset manager has also applied for a spot ETF based on Ethereum, the second largest cyptocurrency in terms of market cap.
“Given the SEC had approved both Bitcoin and Ethereum Futures-based ETFs, it makes sense that following any approval of a spot Bitcoin ETF by the SEC, approval of a spot Ethereum ETF would follow closely.”
Bradley Duke, Chief Strategy Officer, ETC Group
“Blackrock’s application for an Ethereum Spot ETF further proves that the investment world is readying itself to embrace crypto assets,” Bradley Duke, Chief Strategy Officer, ETC Group, said in November. “Given the SEC had approved both Bitcoin and Ethereum Futures-based ETFs, it makes sense that following any approval of a spot Bitcoin ETF by the SEC, approval of a spot Ethereum ETF would follow closely. We fully expect this to be the first, not the only Ethereum Spot ETF application and investment managers should be focusing on crypto assets ahead of expected approvals.”
Binance uncertainty
Despite the industry optimism and upwards market trajectory, the crypto industry has faced several recent setbacks. Changpeng Zhao, founder of the world’s largest cryptocurrency exchange Binance, stepped down recently after pleading guilty to money laundering violations.
“The CZ/Binance scandal and the FTX collapse which resulted in a month-long trial which convicted the FTX founder Sam Bankman-Fried of seven counts of fraud and conspiracy, triggered some short-term volatility, but the crypto market has continued to remain bullish,” Green says.