Bitcoin Awaits ETF Approval to Trigger Institutional Buying Rally, Says EY Executive
A blockchain executive at Ernst & Young (EY) has stated that Bitcoin is experiencing significant demand from institutional investors but is waiting for the approval of a spot Bitcoin exchange-traded fund (ETF) to trigger a buying rally. Paul Brody, EY’s global blockchain leader, believes that the lack of approval from US regulators for a spot Bitcoin ETF has created pent-up demand from institutions. He stated in an interview on CNBC’s Crypto Decrypted that trillions of dollars in institutional money are ready to enter Bitcoin once a BTC ETF receives regulatory approval.
Institutional Interest Limited to Asset Investment
Brody noted that those who are currently buying Bitcoin are primarily purchasing it as an asset rather than as a payment tool. In contrast, Ethereum is being purchased as a computing platform for business transactions and decentralized finance services. He emphasized the need for regulatory-approved investment vehicles like ETFs to enable institutional investors to access cryptocurrencies.
Regulatory Process Under Scrutiny
The statements by Brody come at a time when global investors are closely monitoring the regulatory process for cryptocurrencies by the US Securities and Exchange Commission (SEC). Despite several companies, including Grayscale Investments, ARK Investment, BlackRock, and Fidelity, filing for multiple Bitcoin ETF products with the SEC, none have been approved so far. However, there have been recent amendments made to some ETF filings in response to concerns raised by the SEC.
Positive Signs of Progress
Grayscale Investments, which won an SEC lawsuit in August 2023 regarding a spot Bitcoin ETF review, has filed an S-3 form registration statement with the SEC to list its Grayscale Bitcoin Trust on the New York Stock Exchange Arca. Bloomberg senior ETF analyst Eric Balchunas sees the recent amendments made by ARK Invest and 21Shares to their spot Bitcoin ETF filings as a positive sign of progress and potential impending approvals. He believes that these amendments are in direct response to concerns raised by the SEC.
Hot Take: Bitcoin ETF Approval Expected to Drive Institutional Adoption
The demand for Bitcoin from institutional investors is expected to surge once a spot Bitcoin ETF is approved by regulators. This approval will enable institutions to invest trillions of dollars into Bitcoin, leading to a significant buying rally. Currently, Bitcoin is primarily being seen as an asset rather than a payment tool, while Ethereum is being utilized for business transactions and decentralized finance services. The regulatory process for cryptocurrency ETFs in the US is closely watched, with several companies awaiting approval. Recent amendments made to some filings indicate progress and potential upcoming approvals. Overall, the approval of a Bitcoin ETF is anticipated to drive institutional adoption and further propel the cryptocurrency market.
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