Approval of Bitcoin ETF Could Trigger Massive Institutional Buying Spree, EY warns
Summary:
According to Ernst & Young's global blockchain leader, Paul Brody, Bitcoin (BTC) is seeing heavy demand from institutional investors, which is currently stifled due to pending spot Bitcoin exchange-traded fund (ETF) approval. Brody predicts that this approval could trigger a buying surge from these investors. Furthermore, he noted that Bitcoin buyers view it as an asset, whereas Ethereum is seen as a transaction and decentralized finance (DeFi) platform. Despite the SEC not having approved any ETFs yet, several companies including Grayscale, ARK Investment, BlackRock and Fidelity await a response for their ETF products.
The escalating demand for Bitcoin (BTC) by institutional investors is on hold, pending the approval of a BTC exchange-traded fund (ETF) that could catalyze a purchase spree, as observed by a blockchain executive from Ernst & Young (EY). According to Paul Brody, EY's global leader in blockchain, Bitcoin is poised to satisfy an enormous piled-up demand from institutions, which has been building up over the years due to the refusal of US regulators to authorize a spot Bitcoin ETF.
On CNBC's Crypto Decrypted show that aired on October 23, Brody forecasted the future of cryptocurrency acceptance, emphasizing that a vast pool of institutional funds, amounting to trillions of dollars, is ready to dive into Bitcoin once an ETF for the crypto coin gets a green light. "However, these other institutional funds cannot venture into such territory unless it's either an ETF or another form of regulated acceptable practice," elucidated the blockchain professional at the EY.
Brody further explained that those who purchase Bitcoin mostly regard it as an asset rather than a transaction tool. Meanwhile, Ethereum buyers view it as a trading platform catering to business transactions and providing services in decentralized finance (DeFi).
Brody's statement has come at a time when worldwide investors are keenly following the crypto regulation procedure by the United States Security and Exchange Commission (SEC). Until now, the SEC hasn't sanctioned any Bitcoin ETF. Several firms, including Grayscale Investments, ARK Investment, BlackRock, and Fidelity, are pending regulatory response for their Bitcoin ETF product files with the SEC.
In connection to this, Grayscale, which won an SEC lawsuit for a Bitcoin ETF review in August 2023, recently filed an S-3 form registration statement to put its Grayscale Bitcoin Trust on the New York Stock Exchange Arca list.
A noted senior ETF analyst from Bloomberg, Eric Balchunas, has opined that the recent alteration to the Bitcoin ETF by ARK Invest and 21Shares indicates positive progress and impending approvals. He believes that the ETF changes made in mid-October 2023 are likely a direct answer to the issues raised by the SEC for ETF issuers to address.
Published At
10/23/2023 2:07:16 PM
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