The Competition for Spot Bitcoin ETF Approval
Matthew Hougan of Bitwise believes that only a select few of the many contenders seeking approval from the US Securities and Exchange Commission (SEC) for a spot bitcoin ETF will be successful. He explains that ETFs are generally a “winner takes most” market, with the first firm to market typically attracting the most assets under management. Second-to-market ETFs face difficulty in competing, as investors tend to choose larger and more liquid funds. Nate Geraci, president of ETFStore, agrees and notes that even larger issuers may struggle to overcome the second-to-market disadvantage. Fidelity, BlackRock, Valkyrie Investments, WisdomTree, Invesco, and ARK are among the companies that have filed for a spot bitcoin ETF.
Key Points:
- Only a select few spot bitcoin ETFs will be successful in gaining approval from the SEC.
- First movers in the market tend to attract the most assets under management.
- Second-to-market ETFs face difficulty in competing with larger and more liquid funds.
- Larger issuers may need to undercut on fees to overcome the second-to-market disadvantage.
- Fidelity, BlackRock, Valkyrie Investments, WisdomTree, Invesco, and ARK are among the companies that have filed for a spot bitcoin ETF.
Hot Take:
The competition for approval of a spot bitcoin ETF is fierce, with only a few likely to succeed. The advantage goes to the first movers in the market, making it difficult for second-to-market ETFs to attract investors. Larger issuers may have a better chance, but they still face challenges in overcoming the second-to-market disadvantage. It remains to be seen which companies will emerge as winners in this highly competitive space.
By
By
By
By
By