Future of ETFs in the Crypto Market
The traditional structure of Spot Bitcoin ETFs may be reaching its peak. Mauricio Di Bartolomeo, co-founder and Chief Strategy Officer at Ledn, anticipates a shift beyond vanilla ETFs. He expects these to incorporate a wider range of crypto assets within single investment vehicles in the coming year.
According to Bartolomeo, there is a clear regulatory path for ETFs, legitimizing crypto through their presence. The involvement of established institutions like BlackRock is especially significant as they hold sway in financial markets and have a vested interest in the success of their products. Ethereum is predicted to be the last single-asset crypto deemed โETF-worthyโ by traditional institutions due to a lack of credibility in others โ for now.
However, he foresees several new ETF variations to emerge, outlining the order of their expected arrival. He believes that new ETF variations will take center stage before any other cryptocurrency qualifies for a single-asset ETF.
Bitcoin ETFs Success Paves the Way for Explosive Growth of Hybrid Products
The success of spot-based ETFs will cause an explosion of multiple hybrid ETFs. The cryptocurrencyโs price recently exceeded $52,000, supported by its regained trillion-dollar market cap and consistent inflows into existing spot ETFs. BlackRockโs iShares Bitcoin Trust boasts impressive momentum, adding further fuel to optimism about Wall Streetโs embrace of these financial vehicles.
Bartolomeo stated that โAs an issuer, this is a blockbuster success.โ He highlighted the fact that nine issuers have over a billion in assets and that any one of those launches on its own would have been considered the best launch of the year. This points to the potential for continued growth and expansion within this sector.
ETF issuers like ProShares and Bitwise have already joined the race by filing applications with the US SEC last year for an ETF focused on Bitcoin and Ether called the Bitcoin and Ether Equal Weight Strategy ETF. According to Proshares, the ETF will measure โthe performance of holding long positions in the nearest maturing monthly bitcoin and ether futures contracts.โ
The future landscape of crypto-related ETFs appears promising with increased diversification and inclusion of various cryptocurrencies within investment vehicles. The success of spot-based ETFs has set the stage for explosive growth and innovation within this sector.
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