The potential approval of spot Bitcoin exchange-traded funds (ETFs) in the United States has the potential to significantly boost North America’s share in the global trading volume of crypto-related ETFs. The US Securities and Exchange Commission (SEC) recently issued a delay letter regarding Ark Invest’s application for a spot Bitcoin ETF, raising concerns about the suitability of Bitcoin as an underlying asset and its susceptibility to price manipulation. However, if these ETFs are greenlighted, Bloomberg ETF analyst Eric Balchunas predicts that North America’s percentage of the crypto ETF trading volume could reach 99.5%. The outcome of the pending Grayscale lawsuit against the SEC may also play a pivotal role in the approval of Bitcoin ETFs.
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North America’s Share Of Global ETF Trading Volume To Reach 99.5%?
In the event that spot Bitcoin ETF applications are approved in the United States, North America’s share of the global trading volume for crypto-related exchange-traded funds (ETFs) could potentially reach 99.5%, according to Bloomberg ETF analyst Eric Balchunas. Currently, North America accounts for 97.67% of the total crypto ETF trading volume worldwide. Balchunas predicts that if spot ETFs are introduced in the US, this percentage could increase significantly. This projection highlights the dominant role that North America plays in the crypto ETF market.
Eventual Approval of Spot Bitcoin ETFs
The approval of spot Bitcoin ETFs in the US has been delayed by the Securities and Exchange Commission (SEC). The SEC issued a delay letter regarding Ark Invest’s application for a spot Bitcoin ETF, requesting new written comments on the application. The commission has raised concerns about the suitability of Bitcoin as an underlying asset for an ETF and the potential for price manipulation. This setback raises questions about the fate of other spot Bitcoin ETF applications from asset management companies like BlackRock, Valkyrie, and WisdomTree.
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Issues Raised by the Commission
The SEC’s delay letter regarding the Ark Invest spot Bitcoin ETF application highlights several issues that the commission wants to address before making a decision. These issues include assessing the suitability of Bitcoin as an underlying asset for an ETF, evaluating the potential for price manipulation, and considering the implications of approving a spot Bitcoin ETF in the current regulatory framework. The SEC’s thorough examination of these concerns aims to ensure investor protection and market integrity.
Fate of Other Spot Bitcoin ETF Applications
The delay in the approval process for the Ark Invest spot Bitcoin ETF has raised questions about the fate of other spot Bitcoin ETF applications. Asset management companies like BlackRock, Valkyrie, and WisdomTree have also filed applications for spot Bitcoin ETFs, and their approval is contingent upon the SEC’s decision. The outcome of the Ark Invest application and the SEC’s scrutiny of the broader market will likely impact the fate of these pending spot Bitcoin ETF applications.
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Bloomberg Analyst’s Insights on North American ETF Trading Volumes
Bloomberg ETF analyst Eric Balchunas provides valuable insights into North American ETF trading volumes in the crypto market. Currently, North America accounts for 97.67% of the total crypto ETF trading volume worldwide. This dominance is expected to increase further if spot ETFs are approved in the US, potentially reaching 99.5%. Balchunas highlights the strong performance of crypto-related equity ETFs in 2023, with many of them outperforming traditional equity ETFs. This indicates the growing interest in crypto-related investments and the potential for further growth in North American ETF trading volumes.
Current Percentage of North America in Crypto ETF Trading Volume
North America currently holds a significant percentage, 97.67%, of the total global trading volume for crypto ETFs. This dominance is driven by the mature and highly regulated markets in the United States and Canada. Investors in North America have shown a strong appetite for crypto-related investments, leading to the high trading volume in the region. However, there is still room for growth, especially with the potential approval of spot Bitcoin ETFs.
Potential Increase with Spot ETFs
If spot Bitcoin ETFs are approved in the US, North America’s share of the global ETF trading volume is expected to increase significantly. Bloomberg analyst Eric Balchunas predicts that the percentage could reach 99.5%. The introduction of spot ETFs would open up new investment opportunities for investors in North America and attract more capital into the market. This potential increase in trading volume highlights the importance of regulatory decisions on spot Bitcoin ETFs.
Performance of Crypto-related Equity ETFs
Crypto-related equity ETFs have been among the top-performing ETFs in 2023, according to Bloomberg analyst Eric Balchunas. The best-performing ETF on the list is the Valkyrie Bitcoin Miners ETF ($WGMI), which has achieved a year-to-date return of 227%. This actively-managed fund invests in public companies in the Bitcoin mining industry, benefiting from the positive performance of these mining stocks. Other top-performing crypto-related equity ETFs include the VanEck Digital Transformation ETF, the Global X Blockchain ETF, and the Bitwise Crypto Industry Innovators ETF.
Importance of Pending Grayscale Lawsuit
The pending lawsuit between Grayscale Investments and the SEC could have a significant impact on the approval of Bitcoin ETFs. Grayscale Investments sued the SEC in 2022 after its application to convert its flagship product, GBTC, into a spot Bitcoin ETF was rejected. The outcome of this lawsuit could shape the SEC’s stance on Bitcoin ETFs and influence the regulatory environment for crypto-related investments. The resolution of the lawsuit is awaited with great interest, as it may provide clarity on the path to approval for Bitcoin ETFs.
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Nathan Geraci’s Views on Grayscale Lawsuit
Nathan Geraci, president of the ETF Store, believes that the final judgment in the Grayscale lawsuit could be pivotal for the approval of Bitcoin ETFs. Geraci highlights the importance of the SEC’s view on a specific question raised in the lawsuit. The outcome of the lawsuit and the SEC’s interpretation of this question could influence the regulatory framework for Bitcoin ETFs. Geraci emphasizes that the SEC’s decision will have implications for the broader race to launch a Bitcoin ETF and the future of crypto-related ETFs.
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