Bitcoin ETF Approval in U.S Could Eclipse Current $50 Billion Crypto-ETF Market
Summary:
The U.S. approval for Bitcoin exchange-traded funds (ETFs) could supersede the entire $50 billion crypto-related ETF market, according to data from BitMEX Research. If the Securities and Exchange Commission approves a spot Bitcoin ETF, expected in early January, it could double the investment in crypto ETPs. The ETF research firm, ETFGI, reported that crypto ETFs globally have attracted net inflows of $1.6 billion year-to-date. The ProShares Bitcoin Strategy ETF had the most substantial individual inflows, adding an extra $278.7 million in 2023.
Bitcoin exchange-traded funds (ETFs), if approved in the U.S., could potentially eclipse the present $50 billion market of crypto-related ETFs. BitMEX Research's recent data reveals that the existing global market for cryptocurrency exchange-traded products (ETPs) is composed of around 150 products with a total of $50.3 billion in managed assets.
These ETPs include spot and futures funds, usually tied to the performance of Bitcoin and Ethereum. The largest ETP today is Grayscale’s Bitcoin Trust, currently being transitioned into a spot ETF product. If a spot Bitcoin ETF obtains approval from the Securities and Exchange Commission (SEC), expected as early as Jan. 10, it could potentially double the investment in crypto ETPs.
On Dec.14, crypto investment fund Bitwise projected that spot Bitcoin ETFs would be the most lucrative ETF product ever to launch, estimating a capture of $72 billion in managed assets within the next five years. However, global fund manager Van Eck offered a more cautious prediction, expecting about $2.4 billion to flow into spot Bitcoin products in the first quarter of 2024.
Although a spot Bitcoin ETF has yet to receive approval in the U.S., such a product isn't new to the global market. Countries such as Canada, Australia, and Germany currently permit investors to purchase shares in spot Bitcoin ETFs.
The anticipation surrounding spot Bitcoin ETFs fits into a broader trend of institutional cryptocurrency investment over the recent months. A Dec. 21 report from ETF research firm ETFGI disclosed that crypto ETFs globally have drawn in net inflows of $1.6 billion year-to-date, with November contributing $1.31 billion alone, almost doubling the $750 million net inflows into crypto ETPs in 2022.
Out of the 150 crypto funds, the top 20 ETFs amassed the most significant investment, with a total inflow of $1.3 billion in 2023. The ProShares Bitcoin Strategy ETF (BITO), introduced during a cryptocurrency bull market in October 2021, had the most substantial individual inflows, garnering an extra $278.7 million in 2023.
Published At
12/26/2023 5:30:08 AM
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