The cryptocurrency sector is undergoing a significant transformation with the introduction of Spot Bitcoin ETFs (Exchange-Traded Funds). According to recent data, the collective value of assets invested in Spot Bitcoin ETFs has reached an impressive $4.16 billion on a global scale.
This noteworthy figure underscores the increasing recognition of these innovative financial instruments, providing both retail and institutional investors with a regulated avenue to engage with Bitcoin.
“Canada is a pioneering nation in this sector, hosting seven Spot Bitcoin ETFs with a total investment of $2 billion. The spotlight shines brightly on the Purpose Bitcoin ETF, the largest globally, with $819.1 million in assets. Indeed, this ETF is a beacon of Canada’s progressive stance towards cryptocurrency integration within its financial ecosystem.”
Europe, led by Germany, has also displayed a more open regulatory approach. The ETC Group Physical Bitcoin, launched in June 2020, now holds $802 million in assets, making it the second-largest Spot Bitcoin ETF globally. Additionally, seven other European ETFs are based in tax-friendly jurisdictions, further solidifying Europe’s evolving crypto-friendly ecosystem.
Currently, only eight countries globally have embraced Spot Bitcoin ETFs, including G20 nations Canada, Germany, Brazil, and Australia, and tax havens such as Jersey, Liechtenstein, Guernsey, and the Cayman Islands.
The global distribution of Spot Bitcoin ETFs provides a clear picture of how nations are strategically positioning themselves within the cryptocurrency market.
Conversely, the United States maintains a more cautious stance. The US Securities and Exchange Commission (SEC) has approved only ETFs tied to Bitcoin futures contracts. For example, the ProShares Bitcoin Strategy leads with approximately $1.2 billion in assets.
Despite the anticipation surrounding the approval of as many as ten applications for Spot Bitcoin ETFs, the SEC’s concerns about market manipulation pose a significant obstacle. SEC Chairman Gary Gensler acknowledged the challenges, stating, “I’m not going to prejudge the staff’s work on those multiple ETFs filings, but it’s also about those companies.”
The debate intensifies regarding the potential US Spot Bitcoin ETF market, with experts predicting a surge, estimating first-day demand at $1 billion or more.
The anticipation around the SEC’s decision on pending Spot Bitcoin ETF applications is substantial, with the potential to position the US at the forefront of this sector.
“We could expect $155 billion will flow into the Bitcoin market once these ETFs are approved. The total Assets Under Management (AUM) of these companies are around $15.6 trillion. If they were to put 1% of their AUM into these Bitcoin ETFs, the total US dollar amount that would enter the Bitcoin market would be around $155 billion.”
The SEC’s decision on pending Spot Bitcoin ETF applications could be a pivotal moment, potentially unlocking a new chapter in the crypto industry.
“We expect US-regulated ETFs to be the watershed moment for crypto, and we expect an SEC approval by late 2023/Q1, 2024. Post halving, we expect the Bitcoin spot demand via ETFs to outstrip miner selling by 6-7 times at peak. We expect Bitcoin ETFs to be equivalent to 9-10% of spot Bitcoin in circulation by 2028,” Gautam Chhugani, Global Digital Senior Analyst at Bernstein, expressed.