American financial industry calls for bitcoin spot ETFs

• A new generation of crypto investment products is born

• US financial advisors are calling for bitcoin spot ETFs

• So far, the stock exchange supervisory authority has stood in the way

The demand for crypto spot ETFs is high

In October of last year, the cryptocurrency business experienced something of a revolution when the first Bitcoin futures ETF began trading in the United States. Since then, as BTC-ECHO reports, calls for the introduction of spot ETFs by US financial advisers have become louder and louder. Such funds would replicate a respective cryptocurrency, such as Bitcoin, as an underlying asset, whereby the fund managers actually have to deposit the cryptocurrency as collateral, in contrast to futures ETFs.

A strong indicator of this rush is the recently released Nasdaq survey. The results show that out of a total of 500 financial advisors surveyed, a whopping 72 percent say their preferred method of investing in cryptocurrencies would be through a US-based spot ETF. According to Bloomberg analyst Eric Balchunas, the total volume of assets under management by respondents is a whopping $26 trillion. The financial advisors also stated in the survey that the “optimal crypto share” in the overall portfolio would be around 6 percent.

So far, it still fails because of the stock exchange supervisory authority

However, there is still a serious obstacle standing in the way of the investment product that is so highly demanded by the financial sector. The US Securities and Exchange Commission has so far rejected all applications for the approval of a Bitcoin spot ETF or postponed the decision. However, as Bloomberg ETF analysts Eric Balchunas and James Seyffart explain, a proposed rule change at the agency could pave the way for a bitcoin spot ETF to be approved in mid-2023. According to Balchunas, there is a possibility that crypto platforms could be regulated by the SEC, provided the SEC would accept the proposed change in the definition of “exchange” in January.

According to BTC-ECHO, the rule change would change the Exchange Act to include platforms that “offer any type of securities for trading.” This would then also include cryptocurrencies. This would also lead to a more positive attitude from the regulator towards this type of investment. “Once crypto exchanges are compliant, the number one reason the SEC has given for previous bitcoin spot ETF denials would be obsolete, making approval likely,” the analysts said.

So, Balchunas and Seyffart believe that the definition change decision, which could occur between November 2022 and May 2023, would clear the way for the SEC to approve crypto spot ETFs. This would then also include ETFs related to Bitcoin.

Thomas Weschle / Editor finanzen.net

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