The potential approval of spot Bitcoin exchange-traded funds (ETFs) in the United States could significantly impact the global trading volume for crypto-related ETFs, according to Bloomberg ETF analyst Eric Balchunas. Currently, North America accounts for 97.7% of all crypto ETF trading volume, and Balchunas predicts that if spot ETFs are approved in the US, this percentage could increase to 99.5%.
The Securities and Exchange Commission (SEC) currently has a number of spot Bitcoin ETF applications awaiting approval. One of the anticipated decisions is on Ark Invest’s and 21Share’s joint ARKB fund, which is scheduled to be announced by August 13th. However, a delay in the decision is widely expected. During a Bloomberg interview, Ark CEO Cathie Wood speculated that the regulator might be waiting to approve multiple funds simultaneously.
In line with these developments, Bitwise recently filed an updated prospectus to change its BITC fund from a Bitcoin futures ETF to the “Bitwise Bitcoin and Ether Equal Weight Strategy ETF.” Similarly, Valkyrie made a similar move to include Ethereum Futures in its BTC Futures ETF.
Balchunas commented on these changes, saying, “Cannonball Run in effect.” These developments indicate a growing interest and potential momentum in the crypto ETF space.
In addition to the potential approval of spot Bitcoin ETFs, Balchunas also highlighted the strong performance of crypto-related ETFs. He noted that all of the top 15 best-performing equity ETFs this year have exposure to crypto and blockchain. The Valkyrie Bitcoin Miners ETF, with a return of 227% since the beginning of 2023, topped the performance charts. This ETF is an actively managed fund that invests in public companies in the Bitcoin mining industry.
The VanEck digital transformation ETF and the DAPP fund, which tracks a number of crypto mining and technology firms, also performed well, with returns of 182% and 168% respectively.
These impressive performance numbers are not surprising considering the outperformance of mining firms compared to Bitcoin itself. Many of the top-listed mining companies have seen their stocks outperform Bitcoin this year, contributing to the stellar performance of these crypto-related ETFs.
Overall, the potential approval of spot Bitcoin ETFs in the US could greatly impact the global trading volume for crypto ETFs. Balchunas predicts that if approved, the US could account for 99.5% of the global trading volume. Additionally, the strong performance of crypto-related ETFs showcases the growing interest and potential returns in this sector. As the SEC continues to review and make decisions on various ETF applications, the crypto ETF landscape is expected to evolve further, attracting more investors and increasing trading volumes.
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