Forecasting the Crypto Market with Approved Bitcoin ETFs
David Duong, head of institutional research at Coinbase, predicts that the approval of Bitcoin ETFs by the U.S. SEC could significantly increase the total cryptocurrency market by billions of dollars. In his report titled “Monthly Outlook: Why an ETF Matters,” Duong argues that Exchange-Traded Funds (ETFs) on spot Bitcoin could attract new classes of investors, including registered investment advisors and retirement funds.
“Spot bitcoin exchange-traded funds (ETFs) have the potential to widen crypto access to a new class of investors, including registered investment advisors (RIAs), retirement funds and other institutions that have historically been precluded from this asset class.”
Duong believes that the approval of Bitcoin spot ETFs could ease restrictions imposed on holding Bitcoin and open the door to new products that would use it as an underlying asset.
Coinbase’s Forecasting on the SEC Approval of Bitcoin ETFs
Duong sees the end of 2023 as a possible deadline for the approval of spot Bitcoin ETFs by the US SEC. He also mentioned that chances are high for one or more spot bitcoin ETFs to be approved by the SEC before the end of Q4 2023.
“Typically, the SEC extends its decision window to the furthest extent allowed by its regulatory framework, which in this case would be the final deadline of January 10, 2024 for the ARK-21Shares Bitcoin ETF application.”
Coinbase also noted that there has been meaningful dialogue between various applicants and the SEC regarding their prospectuses, suggesting positive progress in getting spot bitcoin ETFs approved.
Positive News on BlackRock’s Application Pending Verdict
BlackRock has recently proposed a Bitcoin spot ETF and is awaiting an official verdict from the SEC. Markets are also expecting a ruling on an ETF on spot Bitcoin in early January 2024, while one for Ethereum will take longer.
Hot Take: The Future of Cryptocurrency Investment
The approval of Bitcoin ETFs by regulatory bodies like the U.S. SEC could mark a significant milestone in expanding access to cryptocurrencies for institutional investors. This move could potentially attract new classes of investors and unlock liquidity and price discovery for all market participants.
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