- The approval of spot BTC ETFs could increase the US share of crypto ETF trading volume to 99.5%.
- The US effort to establish itself as a global leader in the crypto ETF landscape awaits the decision of the SEC.
The US dominance in the global trading volume of crypto-related exchange-traded funds (ETFs) could reach as much as 99.5%, provided the spot Bitcoin [BTC] ETFs get approval, Bloomberg’s ETF analyst Eric Balchunas tweeted.
Another good chart from the report is this one: North America accounts for 98% of all crypto ETF trading volume in the world. If/when spot ETFs come out in the US, it will likely go to 99.5%. pic.twitter.com/nEF7dcaQu4
— Eric Balchunas (@Eric Balchunas) August 10, 2023
North America already holds 97.7% of the crypto ETF trading volume, as highlighted by Balchunas.
Spot BTC ETFs can propel US crypto ETFs
The Securities and Exchange Commission (SEC) currently has a list of mock Bitcoin ETF filings pending approval. A decision on the joint ARKB fund of Ark Invest and 21Shares is expected on August 13.
In a interview with Bloomberg, Ark Invest’s Cathie Wood wondered if the regulator could wait to approve multiple funds. Balchunas speculated that the percentage of total crypto ETF trading volume could rise further to 99.5% in the US.
On August 10, Bitwise archived an updated prospectus for its ETF fund, transitioning it from a Bitcoin futures ETF to a Bitcoin and Ether Equal Weight Strategy ETF. The move mirrors a similar move by Valkyrie on August 5, when it adjusted its BTC Futures ETF (BTF) to include Ethereum Futures.
“Cannonball Run is in effect,” Balchunas tweeted the next day, signaling the rapid changes in the ETF landscape.
Bitwise draws a Valkyrie that has a $MJ (use name/strategy change to bypass the initial filing process and leave early in this case). Cannonball run in effect. https://t.co/dssrPZya0y
— Eric Balchunas (@Eric Balchunas) August 10, 2023
Balchunas also highlighted that the top 15 best-performing equity ETFs this year all share crypto exposure.
Each of this year’s Top 15 Best-Performing Equity ETFs is crypto-related. $WGMI leading road w +227%. Finally also attracting flows, although quite modest given these performance figures. This is part of our monthly Crypto ETF report via @JSeyff & @SirYappityyapp pic.twitter.com/iPIHhH82Jr
— Eric Balchunas (@Eric Balchunas) August 10, 2023
At the forefront of this was the Valkyrie Bitcoin Miners ETF, with a 227% YTD return. The foundation invests in the Bitcoin mining sector, including Marathon Digital, Riot, and Cipher Mining.
In second place was the VanEck Digital Transformation ETF, with a YTD return of 182%.
Other products included the Global X Blockchain ETF and the Bitwise Crypto Industry Innovators ETF. Both funds posted a return of 168% YTD. Invesco’s Alerian Galaxy Crypto Economy ETF showed solid performance, delivering a 162% YTD return.
The increasing presence of crypto ETFs and their remarkable performance underline the growing importance of cryptocurrencies in the traditional financial markets. The US is poised to potentially cement its dominance in the global crypto ETF market. As the SEC weighs its decisions, the trajectory of the crypto ETF market appears poised for significant shifts.