Bitcoin ETF Success May Lead to Smaller Field Next Year, Says 21Shares President
Bitcoin ETFs have experienced significant success this year, but according to 21Shares President Ophelia Snyder, there may be a smaller field of issuers next year. Snyder believes that only three to five winners will emerge in the market. Since the launch of spot Bitcoin ETFs, the market has seen expected and unexpected developments. Despite the absence of major financial players, the ETFs have been highly successful. Bitcoin ETFs provide investors with exposure to Bitcoin without the need to directly hold or buy the digital asset, removing barriers for crypto-curious investors.
Early Success and Retail Investment
The Securities and Exchange Commission (SEC) previously denied spot Bitcoin ETFs due to concerns about market manipulation. However, earlier this year, the SEC approved 10 such products for trading in the US. Ark’s 21Shares has been one of the biggest winners, crossing the $1 billion assets under management threshold. The early investment in ETFs has primarily come from retail investors rather than advisors or brokers on Wall Street. This retail-heavy market represents pent-up demand over the past decade.
Challenges for Smaller Players
While some firms have already begun offering spot Bitcoin ETFs to clients, others are taking a cautious approach due to routine checks and Bitcoin’s volatility. The competition among issuers is intense, with many cutting their fees ahead of launch day. However, smaller ETFs may struggle to compete with their larger peers that offer higher trading volumes and liquidity. Snyder predicts that the space will be smaller next year as success begets success.
Hot Take: Bitcoin ETF Success Paves the Way for a Concentrated Market
The success of Bitcoin ETFs this year has paved the way for a concentrated market, with only a few winners expected to emerge next year. Retail investors have been the primary drivers of early investment in ETFs, signaling pent-up demand. While some firms have embraced spot Bitcoin ETFs, others remain cautious due to routine checks and Bitcoin’s volatility. The competition among issuers is fierce, with many cutting fees to gain an advantage. However, smaller players may struggle to compete with larger issuers that offer higher trading volumes and liquidity. As a result, the space is expected to shrink next year.
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