Digital Assets: Bernstein Paints Bullish Picture Of Crypto If SEC Flags Off A Spot Bitcoin ETF

August 14, 2023 | Digital Assets, News

If approved, a spot bitcoin ETF could trigger bullish sentiments in crypto. But a former SEC official rained on this parade.

A recent report from brokerage firm Bernstein highlights the potential significance of approving Bitcoin Spot Exchange-Traded Funds (ETFs) in driving a new cycle of growth in the cryptocurrency market. These ETFs not only create demand in the spot market but also trigger a positive market signal, attracting retail and institutional flows seeking legitimacy.

The report suggests that due to interest from global asset managers and potential solutions to address the concerns of the U.S. Securities and Exchange Commission (SEC), the probability of ETF approval has increased. Bernstein estimates that a Bitcoin spot ETF market could reach 10% of Bitcoin’s market cap within two to three years. (CoinDesk)

The SEC’s ongoing review of ETF applications, including those from prominent finance players like BlackRock and Fidelity, reflects the evolving regulatory landscape. Bernstein anticipates that cryptocurrency ETFs will benefit from strong branding efforts by global asset managers and distribution efforts by retail brokers and financial advisors.

The report also highlights potential sources of new capital that could fuel a new crypto cycle, including fresh stablecoin supplies, tokenization of traditional assets, native crypto infrastructure tokenization, and ETF investments.

While the report discusses the potential for a positive growth cycle, former SEC official John Reed Stark offers a more cautious perspective on the much-anticipated SEC approval. He suggested in a tweet that the approval of a spot Bitcoin ETF in the U.S. might not occur until at least 2024, after the presidential election.

Stark points out that the regulatory environment could shift significantly depending on the outcome of the election, potentially leading to more crypto-friendly policies if a Republican-appointed SEC Commissioner becomes acting Chair.

Related Story: Mike Novogratz Expects SEC To Greenlight Spot Bitcoin ETF In Six Months

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