The The possibility of a Bitcoin Spot Exchange Traded Fund (ETF) launch in the US, which has received a lot of attention in recent months, has once again made headlines due to recent suggestions from Bloomberg ETF analyst Eric Balchunas.
According to the analyst Should the U.S. Securities and Exchange Commission (SEC) approve BlackRock’s Bitcoin Spot ETF, a massive pool of $30 trillion of capital overseen by U.S. financial advisors could be sent to Bitcoin investments.
Remarkable, Balchunas clarified that while the approval of a BTC spot ETF could serve as an accessible path for the $30 trillion managed by financial advisors to potentially flow into BTC investments, it’s not particularly certain whether the entirety of the $30 trillion would go to Bitcoin.
That’s what the analyst noticed only a fraction of that amount might consider investing. Balchunas noted, “But even if 0.5% of that is allocated, it’s $150 billion.”
Hey, I said a spot ETF will be a bridge to the $30B that advisors manage, of which a very small amount is allowed to invest, not all 30! 🙂 But even if 0.5% of that is allocated, it’s $150 billion
— Eric Balchunas (@Eric Balchunas) September 5, 2023
Aftermath of BlackRock’s Bitcoin Place ETF
It is worth noting that wWhen BlackRock, with more than $9 trillion in assets under management, filed its Bitcoin spot ETF application, it not only marked its entry. It also dramatically tilted the probability scales for an ETF approval.
Before BlackRock came into the picture, the Bloomberg expert claimed that the odds of a BTC spot ETF seeing the light of day in the US hovered around 1%. However, after BlackRock’s involvement, Balchunas revealed in a podcast that the probability increased to 50%.
Their application had consequences. Balchunas observed a subsequent increase in similar applications from reputable entities, namely ARK Investment, Valkyrie and Fidelity. This underlined BlackRock’s influence and the escalating competition in the space.
Balchunas noted:
Their application sparked a wave of similar applications from other leading companies such as ARK Investment, Valkyrie and Fidelity, paving the way for a highly competitive environment.
Spot ETF vs. Futures ETF: the real potential
The US is not entirely new to BTC ETFs. Bitcoin futures ETFs have already made their mark, albeit to a limited extent.
In their current form, these futures-based ETFs have total assets under management of roughly $1 billion. A figure that, while impressive, seems small in light of the potential of a spot ETF.
Balchunas went so far term the BTC mocks ETF the ‘holy grail’. A product that, if approved, could eclipse existing futures ETFs and charge the crypto domain in a way never seen before.
Meanwhile, amid the race to approve a Bitcoin spot ETF, BTC has been in a continuous downtrend for the past week. The asset has fallen below $26,000, down 5.7%. Bitcoin is currently trading at $25,501, at the time of writing, down nearly 1%.
Featured Image from iStock, Chart from TradingView