In a monumental shift for Wall Street, the impending approval of Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) is generating significant excitement, marking a potential breakthrough for crypto adoption among institutional and retail investors alike.
The expected approval, slated for mid-January or sooner, signifies a regulatory turnaround after a decade of SEC rejections for Bitcoin ETF applications. This development has triggered a new hype cycle, fueled by expectations that wealth managers and financial advisers will diversify their trillion-dollar portfolios by allocating a fraction to the burgeoning crypto market.
The anticipated involvement of industry titans such as BlackRock, Fidelity, and Invesco suggests a transformative phase for the Bitcoin ETF market. Bloomberg Intelligence estimates that, with their participation, the market could burgeon into a formidable $100 billion entity over time.
Galaxy Digital Holdings Ltd, collaborating with Invesco Ltd on an ETF application, recently hosted a call with approximately 300 investment professionals. The discussion revolved around strategizing Bitcoin allocations as the ETF debut looms on the horizon, as reported by a reliable source familiar with the matter.
Jeff Janson, a wealth adviser at Summit Wealth based in Naples, Florida, managing around $550 million, is gearing up for the anticipated debut. In an interview, Janson expressed optimism about the SEC finally granting approval, stating, “Once you have access to it in that type of a wrapper, I think you’re going to have a significant amount of institutional-level interest.”
Despite this optimistic outlook, the shockwaves from the FTX implosion in the previous year continue to resonate across the investment landscape, tempering enthusiasm for cryptocurrencies relative to the speculative euphoria of earlier days.
Following the collapse of Sam Bankman-Fried’s empire, everyday investors have notably shied away from the market. Although Bitcoin has experienced a recent rally, it remains far from its 2021 peak. Moreover, major asset managers have been reserved in articulating the crypto opportunity, reflecting a cautious stance amid the lingering aftermath of market turbulence.
As the crypto industry awaits the SEC’s green light for Bitcoin ETFs, proponents anticipate that this regulatory milestone will mark a new era for digital asset adoption, bringing crypto investments into the mainstream financial fold. The potential involvement of reputable financial institutions and the prospect of an expansive market offer a glimpse into the evolving landscape of cryptocurrency investments on Wall Street.