The approval of a spot exchange-traded fund (ETF) based on the first cryptocurrency will bring fresh capital into the digital asset market and pave the way for retail and institutional investors to enter. This is stated in the Bernstein report, according to CoinDesk.
According to analysts, cryptocurrency ETFs will benefit from “strong marketing from the world’s leading fund managers” and “distribution from retail brokers and financial advisors.”
The company noted that the capital to launch a new market cycle will come from fresh supplies of stablecoins, tokenization of traditional assets and the development of the blockchain infrastructure itself.
“Thanks to the interest of the world’s leading asset managers in bitcoin-based spot ETFs and potential ways to overcome US Securities and Exchange Commission (SEC) objections, the likelihood of approval has increased,” the experts write.
Bernstein expects that the sector of spot exchange-traded funds based on the first cryptocurrency will take 10% of the total capitalization of the asset in the first two to three years.
On June 15, BlackRock filed an application for a spot Bitcoin ETF with the SEC. Following the financial giant, similar requests came from Valkyrie, Fidelity Investments, WisdomTree and Invesco.
The Commission later returned all applications because they did not contain sufficient information regarding the so-called joint monitoring agreement or the details of this mechanism.
Subsequently, the above-mentioned companies promptly sent updated proposals to the department. On July 14, the regulator accepted applications from BlackRock, VanEck, Invesco, Fidelity Investments and WisdomTree for consideration.
The Chicago Board Options Exchange also modified the ARK 21Shares launch document to include a joint oversight agreement to prevent fraud and market manipulation by copying part of BlackRock’s bid. On August 11, the SEC extended its review of this application.
Earlier, Bernstein announced a high probability of approval of spot bitcoin ETFs. Experts noted that the regulator has already approved exchange-traded futures funds based on digital gold, including those with leverage from Volatility Shares.
A similar opinion is shared by former SEC chairman Jay Clayton.
However, the ex-lawyer of the department, John Reed Stark, believes that the Commission will not approve the bitcoin ETF for a number of good reasons. In his opinion, the victory of the representative of the Republican Party in the presidential election can change the situation.
Recall that the head of ARK Invest, Kathy Wood, and Matrixport analysts predicted a positive decision on several applications at once.
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