Effect of U.S. Spot Bitcoin Approval on $30 Trillion U.S. Wealth Management Industry Discussed by Coinbase Executive

Singapore Director at Coinbase Shared Thoughts on U.S. SEC-Approved Spot Bitcoin ETFs

You recently heard from Hassan Ahmed, the Country Director for Singapore at Coinbase, who discussed what the potential impact of a U.S. SEC-approved spot Bitcoin ETF could be on the cryptocurrency market.

Impact of U.S. SEC-Approved Spot Bitcoin ETFs

Hassan Ahmed emphasized the significance of a U.S. spot Bitcoin ETF, describing it as a “structural market change” for cryptocurrencies. He believes it signifies a major shift in the asset class’s recognition and acceptance, likely leading to substantial demand and fund inflows into Bitcoin. The approval of this ETF would be a big deal.

Expected Increase in Demand for Bitcoin

Attending the upcoming Bitcoin halving event combined with the widely expected approval of spot Bitcoin ETFs could lead to a significant increase in demand for Bitcoin, according to Ahmed.

Increase in Bitcoin Transaction Fees

Bitcoin’s transaction fees have been increasing since 2020 due to the growing demand for Bitcoin block space, driven by developments like inscriptions and ordinals within the crypto-native space.

Regulatory Landscape and Institutional Investments

Ahmed stressed the necessity of a robust regulatory framework for institutional investments due to the cryptocurrency’s emergence. The FTX collapse has triggered discussions about the necessity of regulatory landscape.

Timeline for Approval by the SEC

The industry had been advocating to the SEC for nearly a decade for the approval of Bitcoin ETFs. The deadline for the formal approval or deferment of the ARK 21Shares Bitcoin ETF is January 10. Ahmed highlighted the extensive technical diligence by the SEC as a positive sign of progress.

Potential Inclusion in Wealth Management Portfolios

The $30 trillion U.S. wealth management industry is currently unable to invest in Bitcoin. The approval of spot Bitcoin ETFs would enable wealth managers to include Bitcoin in their portfolios. This development could lead to more efficient portfolios and increased recommendations for cryptocurrency exposure, according to Ahmed.

Hot Take

The potential approval of U.S. SEC-approved spot Bitcoin ETFs seems to be a major opportunity for the cryptocurrency market, with significant potential impact on the demand for Bitcoin, adoption in wealth management portfolios, and the greater legitimization of cryptocurrencies.