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BitMEX Research recently conducted a comprehensive study on cryptocurrency exchange-traded products (ETPs), uncovering a landscape that extends beyond the contenders for a spot Bitcoin ETF.
Published on December 25, the research unveiled a total of 150 cryptocurrency-related ETPs globally, collectively managing assets worth $50.3 billion.
This comprehensive list not only offers a detailed panorama of the current crypto ETP ecosystem but also serves as a valuable tool for assessing the potential impact of a spot Bitcoin ETF.
BitMEX Research emphasized the importance of understanding how a spot Bitcoin ETF could influence existing ETPs or attract new capital, providing insights into the evolving dynamics within the cryptocurrency investment space.
Spot Bitcoin ETFs: Potential Cannibalization of the Crypto ETP Landscape
The potential cannibalization of the crypto ETP landscape raises the possibility of funds flowing from existing products to new spot Bitcoin ETFs, with Grayscale’s Bitcoin Trust (GBTC) standing out as the largest among them, boasting $27 billion in assets under management.
With $27 billion in assets and a robust investor base, Grayscale’s Bitcoin Trust (GBTC) faces potential challenges if the SEC approves rival spot products ahead of allowing GBTC to convert its fund concurrently, voiced by CEO Michael Sonnenshein, who expressed concern over the possible disadvantage to GBTC investors.
As approximately twelve firms await SEC approval for their products, expectations lean towards a collective approval in early January.
Despite this, the market appears to have already factored in potential ETF approvals, mitigating the probability of an immediate demand shock for Bitcoin.
Analysts foresee a gradual impact on Bitcoin demand over time, envisioning its increasing role as a mainstream asset. Willy Woo, a prominent analyst, predicts a future where Bitcoin becomes a standard allocation in wealth portfolios.
It's the eve before the BTC spot ETF.
— Willy Woo (@woonomic) December 24, 2023
The day is coming fast when #Bitcoin becomes a mainstream bucket for wealth allocation.
When that day comes, the top 1% most wealthy will hold 0.87 BTC***. That's how little of it there is to go around.
**Assumes 5% allocation. pic.twitter.com/L5ao0x2xDT
According to his projections, the top 1% of the wealthiest individuals could hold 0.87 BTC with a 5% portfolio allocation, signifying a broader trend towards Bitcoin’s integration into mainstream wealth strategies.
Navigating Potential Threats and SEC Considerations
Envisioning a gloomy future, BitMEX founder Arthur Hayes raises concerns about traditional finance institutions’ ETFs potentially posing a threat to Bitcoin.
Hayes fears a scenario where a handful of powerful firms could amass and control all BTC, potentially rendering the entire blockchain network useless.
In response to this, the SEC has informed issuers that applications fully completed and filed by Friday, Dec. 29, will be part of the first wave for consideration.
Notably, last week saw several issuers, including BlackRock, Wisdomtree, and Ark, amending their filings to accommodate cash creation and redemptions.
This strategic shift in approach indicates the evolving landscape and considerations within the cryptocurrency investment sphere.
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