ETFs outlook for the crypto world
Galaxy Digital Holdingsat the beginning of the month, he gathered around 300 investment experts for discuss the potential of Bitcoin In relationship with debut of new spot ETFs. According to estimates, the new financial product could itself create a a new market worth about 100 billion dollars in a short time.
Moreover, according to the rumors he published Bloombergthere is already talk of one on Wall Street “turning point” of the crypto marketwith ETFs being framed as a new privileged channel for channeling mass investment from institutions and new retail investors.
Even if these were limited investments, a small percentage of the billion dollar portfolios of these institutional entities actually could open a new chapter for the entire crypto ecosystem.
This new scenario could also represent a type “redemption” for the whole communitya year after the collapse of FTX, it brought down the industry and gave strength to all opponents of cryptocurrencies, especially in the regulatory field.
BTC spot ETF potential for tradFi
One of the main reasons why there is a renewed optimism is connected with the nature of the ETF itselfwhich would allow managers direct control over assets without the added costs of a “future” ETF, which can significantly impact returns.
Furthermore, it is no secret that various institutional entities are already recommending an investment strategy that includes a certain percentage allocation towards alternative assetswhich includes cryptocurrencies.
Compass Financial Advisorsfor example, through its advisory, it suggests a portfolio with 55% spread over stocks, 25% over bonds and 20% for liquidity, alternative assets and digital assets. And it wouldn’t surprise anyone to see those percentages flow into BTC and ETH spot ETFs once they become available.
The next factor to consider, in perspective, would be “normalization” of the hitherto discredited asset class. According to Coinbase, in fact, the transparency and liquidity of the new ETFs will primarily offer a favorable opportunity to institutional counterparties based on compliance achieved by these toolswhich in turn will be able to start new operations on derivative products and loans.
“What the ETF Represents for Bitcoin Adoption goes beyond immediate inflows into these products“, we read in exchange report. “Although we believe it will take time for this scenario to materialize.”