Asset managers around the world have been eagerly awaiting the approval of Bitcoin (BTC) exchange-traded funds (ETFs) in the United States. Hashdex, one of the 13 asset managers with pending applications, is optimistic about the future. According to their U.S. and Europe head of product, Dramane Meite, the first spot Bitcoin ETF could land as early as the second quarter of 2024, with a spot Ether (ETH) ETF to follow. In this article, we will delve into the current state of ETF applications in the US and explore the potential impact of their approval.
While the exact timing of a spot Bitcoin ETF in the US remains uncertain, Hashdex believes the narrative has shifted from “if” to “when.” In 2023, the industry saw a significant shift in sentiment towards these investment vehicles. The hashdex report suggests that US investors could gain access to a spot Bitcoin ETF by the second quarter of 2024, with a spot Ether ETF to follow.
Hashdex is just one of the 13 asset managers with pending spot Bitcoin ETF applications before the US Securities and Exchange Commission (SEC). The approval process is complex and involves multiple regulatory hurdles. While analysts like James Seyffart and Eric Balchunas from Bloomberg ETF have expressed confidence in the approval, stating a 90% probability before January 10, 2024, it is important to note that this confidence only applies to the 19b-4 applications. The separate Form S-1 approval is also crucial for the launch of an ETF.
Even with potential approval, there may be a gap between approval and actual launch. This lag time could range from weeks to months, as companies must navigate the regulatory landscape and overcome any additional challenges. However, once approved, these ETFs could unlock a market worth an estimated $50 trillion, surpassing the combined market size of Europe, Canada, and Brazil. As the only three global markets with spot crypto exchange-traded products, the US market has the potential to revolutionize the industry.
The approval of spot Bitcoin and Ether ETFs in the US would undoubtedly have a significant impact on the crypto market. It would open the door for institutional and retail investors to gain exposure to these digital assets through regulated and accessible investment vehicles. This increased demand could potentially drive up the prices of Bitcoin and Ether, as more investors seek to allocate capital to these assets.
The journey towards approving spot Bitcoin and Ether ETFs in the US has seen progress, but many uncertainties still exist. Hashdex’s outlook report provides a cautiously optimistic perspective, expecting the first spot Bitcoin ETF to launch in the second quarter of 2024, followed by a spot Ether ETF. While there are still regulatory hurdles to overcome and a potential lag between approval and launch, the approval of these ETFs could transform the crypto market and provide investors with new opportunities for exposure. As we move forward, all eyes will be on the SEC as the industry awaits their decision.