Even with the increasing popularity of different cryptocurrency exchange-traded funds (ETFs) worldwide, there is a persistent question in the global trading community: When will a spot Bitcoin (BTC) ETF be available in the United States?
Some ETF analysts suggest that a spot Bitcoin ETF could potentially launch by mid-2023, after facing rejections from the U.S. Securities and Exchange Commission (SEC) for several years. Despite the SEC’s resistance to the idea, industry participants like Grayscale are actively advocating for a spot BTC ETF.
The anticipation surrounding the potential approval of a spot Bitcoin ETF by the SEC stems from several reasons.
Hany Rashwan, the CEO of 21Shares, believes that a spot Bitcoin ETF could provide access to the crypto market for institutional and retail investors who are currently unable to participate in the digital asset space.
Rashwan highlighted the obstacles faced by both institutional and retail investors. He mentioned, “On the institutional side, investors face limitations due to investment constraints and uncertain regulations. For retail investors who may not be tech-savvy, the challenges of investing in crypto include setting up a wallet and trading on unfamiliar exchanges and platforms. Investing in an ETF would address these issues.”
While acknowledging the risks associated with this new asset class, Rashwan emphasized that similar risks exist with other products.
An advantage of holding crypto ETFs over cryptocurrencies directly is the ability for investors to buy and sell the ETF through traditional banks or brokers into their existing investment or trading portfolios without the need to create new accounts or wallets, as outlined by the 21Shares CEO.
Total Crypto ETF Assets Reach $16.3 Billion
Although a pure Bitcoin ETF has not yet been approved by the U.S. SEC, these investment products have gained popularity in other countries. Canada introduced its first Bitcoin ETF, the Purpose Bitcoin ETF, in February 2021, leading the way for spot BTC ETF adoption globally.
Australia is set to launch three new spot cryptocurrency ETFs on May 12, including a BTC ETF from Cosmos Asset Management and BTC and Ether (ETH) ETFs from 21Shares.
In addition to asset-based ETFs, there is a wide range of ETFs tied to asset derivatives like futures or contracts involving stocks of major companies in the crypto industry.
The popularity of crypto ETFs has been steadily increasing, with total assets invested in crypto ETFs and exchange-traded products (ETP) reaching $16.28 billion by the end of Q1, according to ETF research firm ETFGI.
21Shares CEO highlighted the growing trend of investors viewing crypto allocation as a crucial part of diversifying their portfolios. He stated that investors prefer using ETFs due to their ease of access, cost-efficiency, and transparency.
Since introducing its first crypto ETPs in 2018, 21Shares has launched a total of 31 crypto ETPs and listed them on major stock exchanges in Frankfurt, Zurich, Paris, and Amsterdam. The company made an attempt to launch a spot Bitcoin ETF in the US by filing with the SEC for the ETF in collaboration with Ark Investment Management in June 2021, which was officially rejected by the SEC on March 31.
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