The institutional appetite for Bitcoin is currently surging, with all eyes on the prospect of a spot Bitcoin exchange-traded fund (ETF) gaining regulatory approval. Ernst & Young’s Global Blockchain Leader, Paul Brody, underlines the massive demand for Bitcoin among institutional investors, emphasizing that the catalyst for a significant buying surge is the approval of a BTC ETF.
However, Brody highlights a key obstacle that has been inhibiting institutional capital from flowing into Bitcoin: the absence of a regulatory-approved spot Bitcoin ETF in the United States. Despite the considerable pent-up demand, it remains constrained due to regulatory factors.
In a recent discussion on CNBC’s “Crypto Decrypted,” Paul Brody shed light on the waiting trillions of dollars that are poised to enter the Bitcoin market as soon as a BTC ETF gets the regulatory green light. He emphasizes that for various institutional funds, Bitcoin remains off-limits until it gains the status of an ETF or some other form of regulatory approval.
Furthermore, Brody makes an interesting distinction in investor behavior between Bitcoin and Ethereum. Bitcoin, he notes, is predominantly perceived as a store of value, while those acquiring Ethereum are often drawn to its utility as a platform for business transactions and decentralized finance (DeFi) services.
The anticipation of a spot Bitcoin ETF has garnered the attention of global investors who are closely tracking the regulatory developments at the U.S. Securities and Exchange Commission (SEC). Surprisingly, the SEC has yet to approve a single spot Bitcoin ETF, despite multiple filings from prominent companies, including Grayscale Investments, ARK Investment, BlackRock, and Fidelity. These companies have submitted requests for various Bitcoin ETF products and are presently awaiting a regulatory response.
Of particular note is Grayscale, which emerged victorious in an SEC lawsuit related to its spot Bitcoin ETF review in August 2023. The firm has recently taken a significant step by filing an S-3 form registration statement with the SEC for the listing of its Grayscale Bitcoin Trust on the New York Stock Exchange Arca.
In a promising development, ARK Invest and 21Shares have made amendments to their spot Bitcoin ETF, a move that Bloomberg’s senior ETF analyst, Eric Balchunas, deems a positive sign of progress and imminent approvals. These amendments, filed in mid-October 2023, are seen as a direct response to concerns raised by the SEC, addressing key issues and potentially paving the way for regulatory approval.
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