The crypto industry is at an unprecedented inflection point, which could serve as a “generational investment opportunity” that will be fleeting as more institutions enter the space and network effects lead to exponential growth, according to new research.
Digital asset manager Hashdex, which is currently eyeing a spot Bitcoin ETF approval, believes prospects for such funds in the US are as high as ever, and as regulated investment vehicles become more common, the role of crypto in portfolios will continue to expand.
Spot Bitcoin ETF “When?”
In its report this week, Hashdex said the exact timing of a spot bitcoin ETF in the US remains unclear, but in 2023, the narrative around this product switched from a question of “if” to a matter of “when.”
The asset manager predicted that US investors will have access to a spot bitcoin ETF by the second quarter of the new year, and a spot ether ETF is likely to follow.
Hashdex said the crypto ETFs in the US will be a story of scaled distribution, with spot ETFs expected to unlock the retail and wealth opportunity in the country – across financial advisors, direct retail, and private banks.
This alone is estimated to be a $50 trillion AUM market, which is significantly larger than Europe, Canada, and Brazil combined. Notably, these three markets already have crypto ETPs.
In addition to the scaling of distribution within the world’s largest market, the report said that there will also be the emergence of captive distribution, which would subsequently enable legacy asset managers with thousands of staff and trusted brands to offer their customers a crypto product for the first time.
“Four of the largest asset managers in the world, with close to $17 trillion in AUM, have filed for spot bitcoin ETFs. This is creating exceptional conditions for the broad acceptance of crypto in distribution channels and among financial advisors, helping crypto to go mainstream as it is deployed into existing trusted channels and model portfolios.”
Talks in Advance Stages
The US Securities and Exchange Commission (SEC) has repeatedly rejected spot Bitcoin ETF applications, expressing concerns about market manipulation. However, recent information suggests a shift, as the regulatory agency is now asking for details usually requested towards the end of an ETF application process.
According to a recent Reuters report, discussions regarding the introduction of spot Bitcoin ETFs in the United States have progressed significantly. Unidentified sources revealed that the SEC has started posing detailed and technical inquiries about the products of potential spot Bitcoin ETF issuers. This development suggests that the regulator may be moving towards approving their pending applications shortly.