Bitcoin (BTC) is currently experiencing high demand from institutional investors, who are eagerly awaiting the approval of a spot BTC exchange-traded fund (ETF) to trigger a significant buying rally. This insight comes from Paul Brody, the global blockchain leader at Ernst & Young (EY), a professional services provider.
According to Brody, Bitcoin has a substantial amount of pent-up demand from institutions, primarily due to the lack of approval for a spot Bitcoin ETF by United States regulators for years. In an interview on CNBC’s Crypto Decrypted on October 23, Brody discussed the outlook for cryptocurrency adoption and stated that trillions of dollars in institutional money are poised to enter Bitcoin once a BTC ETF receives regulatory approval.
Brody also highlighted the different motivations behind purchasing Bitcoin and Ethereum. He noted that those buying Bitcoin are primarily buying it as an asset, rather than a payment tool. On the other hand, individuals purchasing Ethereum are using it as a computing platform for business transactions and decentralized finance (DeFi) services.
These remarks from Brody are particularly relevant given the current global focus on the regulatory process for cryptocurrencies by the U.S. Securities and Exchange Commission (SEC). Despite multiple filings from companies such as Grayscale Investments, ARK Investment, BlackRock, and Fidelity, the SEC has not yet approved a single spot Bitcoin ETF. As a result, anticipation is building within the industry as to when such approval will be granted.
Grayscale, a major player in the crypto space, has recently filed an S-3 form registration statement with the SEC to list its Grayscale Bitcoin Trust on the New York Stock Exchange Arca. This move follows Grayscale’s success in winning an SEC lawsuit for a spot Bitcoin ETF review back in August 2023.
Eric Balchunas, a senior ETF analyst at Bloomberg, believes that recent amendments to the spot Bitcoin ETF by ARK Invest and 21Shares are positive signs of progress and potential impending approvals. Balchunas suggests that these amendments, filed in mid-October 2023, may be a direct response to concerns raised by the SEC, which ETF issuers are now addressing.
Overall, the anticipation surrounding the approval of a spot Bitcoin ETF is at an all-time high. Institutional investors are eagerly waiting for the green light from regulators, which is expected to pave the way for a significant influx of funds into Bitcoin. Until then, the industry remains on standby, closely monitoring the regulatory developments and hoping for a positive outcome.