“The spot ETF approval will increase daily volumes and liquidity by an order of magnitude and symbolizes a much larger movement – a total reset in crypto market structure. One cannot overstate the importance of this news. With this approval, crypto is no longer on the fringe of capital markets. It’s now just one asset class among others. The debate is over.”
In the wake of the SEC’s recent approval of Bitcoin ETFs, the cryptocurrency market is witnessing a surge in offerings, with eleven BTC Spot ETFs emerging from well-established issuers such as Bitwise, ARK, Blackrock, Fidelity, Grayscale, and others.
While the anticipated spike in Bitcoin prices aligns with expectations, the trading community is particularly intrigued by Ethereum’s remarkable weekly surge of 15.3% as of January 11, 2024. Analyst Rahul Nambiampurath from Trading.biz asserts that this surge is fueling optimism around the forthcoming ETH spot ETFs, expected from prominent players like Grayscale, VanEck, and Hashdex.
ETF issuers charging a premium must offer better strategies
Diverging from the straightforward nature of BTC spot counters, spot ETFs introduce additional complexities. Notable among these are fee competitions among issuers and challenges arising from arbitrage, stemming from differences between spot and futures prices.
Spot BTC ETF issuers are proposing fees ranging from 0.21% to 1.5%. The variance in fee structures is anticipated to provide investors with diverse options, potentially making spot BTC exposure more accessible to the public. This move comes months ahead of the much-anticipated halving event, promising a price-specific boost.
The list of spot BTC ETF issuers includes:
- Ark 21Shares Bitcoin ETF (ARKB): 0.21%
- Bitwise Bitcoin ETF (BITB): 0.24%
- iShares Bitcoin Trust (IBIT): 0.25%
- VanEck Bitcoin Trust (HODL): 0.25%
- Grayscale Bitcoin Trust (GBTC): 1.50%
“ETF issuers charging a premium, in terms of fees, need to provide improved fund management strategies, efficient market accessibility, and unique investment strategies to stay relevant,” said analyst Rahul Nambiampurath from Trading.biz. Regardless of fee structures, spot ETFs are anticipated to boost market participation, enhance liquidity, and deepen the market as more issuers enter the BTC buying space.
“Crypto no longer on the fringe”
Other industry leaders have commented on the disruptive nature of the SEC’s approval of Spot Bitcoin ETFs, highlighting the monumental win for the entire industry, which is now no longer on the fringe of capital markets.
Martin Garcia, Co-CEO, VersiFi, said: “A publicly listed ETF in the US is a monumental win for the entire industry. It will not only provide another investment avenue for everyday investors but also gives large institutions that would otherwise not be involved the white space to devote real time and energy to an asset class that has been viewed in many circles as less than legitimate.”
Brandon Mulvihill, CEO, Crossover Markets, added: “The spot ETF approval will increase daily volumes and liquidity by an order of magnitude and symbolizes a much larger movement – a total reset in crypto market structure. One cannot overstate the importance of this news. With this approval, crypto is no longer on the fringe of capital markets. It’s now just one asset class among others. The debate is over.”
