The US Securities and Exchange Commission's (SEC) approval of US-listed exchange-traded funds (ETFs) to track bitcoin could generate as much as $5 billion worth of institutional investments in the short-term along with a massive influx of new retail and institutional investors, industry insiders and experts predict.
SEC’s ruling has approved 11 applications including Black Rock, Vanguard, Bitwise, Greyscale, Franklin Templeton, Valkyre, ark Investment, Hashdex, Fidelity, CBOE and Invesco. According to media reports, some products are expected to begin trading from Thursday onwards, creating a fierce competitive landscape.
Sidharth Sogani, co-founder and CEO at crypto research firm CREBACO Global said, “Flood gates are now open. Institutional investments will now flow in. We anticipate about $5 billion coming in the next 45 days. ETFs will bring more stability to the price of Bitcoin since the liquidity risks will be reduced with time.”
“This is a big move for decentralisation going mainstream,” he added.
According to Ashish Singhal, Co-founder and Group CEO, of PeepalCo and CoinSwitch, the ETF news could bring some “short-term volatility in the market, the bigger picture is the long-term potential.”
“An ETF will be the simplest form of Bitcoin exposure for retail users. Investors can seamlessly benefit from Bitcoin price movements without the complexities of digital wallets or drastic investment strategy overhauls,” he said in a post on X, formerly Twitter.
Singhal added, “Imagine the impact if 401(k) retirement plans start investing in Bitcoin ETFs. These funds manage a staggering $6 trillion for about 60 million Americans. That influx of retail investors will familiarize crypto even further and help onboard millions of new users to crypto.”
Also read: Why a US bitcoin ETF is a game-changer for crypto
Rajagopal Menon, Vice President at the country’s largest crypto exchange WazirX said the impact of this development will continue for some time at least. The companies will be quick to get their marketing teams for Bitcoin on the ground while a lot of institutional money will pour into the space.
He added, “April is the month of halving and the supply shock plus the excessive money supply is the perfect storm for Bitcoin price. The excitement will then move to Ethereum as speculation will mount about an Ethereum ETF.”
When asked about the possible India impact, he told Moneycontrol that this will all ultimately depend upon regulations that come in place, as even for SEC the regulatory discussions in the US have been happening for the last few years.
“We are yet to have this type of discussion in India. Things will change because India has a signatory to the G20 Delhi declaration which outlines of regulatory roadmap till 2025,” he said.
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