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The crypto industry is experiencing a crucial turning point that presents a unique investment opportunity. According to research conducted by digital asset manager Hashdex, this opportunity may be short-lived as more institutions enter the space and network effects drive exponential growth. Hashdex believes that the prospects for Bitcoin exchange-traded funds (ETFs) in the US are currently very high, and as regulated investment vehicles become more prevalent, the role of cryptocurrencies in investment portfolios will continue to expand.
While the exact timing of a spot Bitcoin ETF in the US remains uncertain, Hashdex predicts that the narrative has shifted from “if” to “when.” The asset manager anticipates that US investors will have access to a spot Bitcoin ETF by the second quarter of 2023, with a spot Ether ETF likely to follow. The report suggests that the introduction of crypto ETFs in the US will unlock a significant retail and wealth opportunity, estimated to be a $50 trillion market. This market is larger than the combined markets of Europe, Canada, and Brazil, which already have crypto exchange-traded products (ETPs).
In addition to the scaling of distribution within the US market, the report highlights the emergence of captive distribution. This would enable legacy asset managers with established brands and thousands of staff to offer their customers a crypto product for the first time. The report notes that four of the world’s largest asset managers, with a total of $17 trillion in assets under management (AUM), have filed for spot Bitcoin ETFs. This development is expected to contribute to the mainstream adoption of cryptocurrencies as they are integrated into existing trusted channels and model portfolios.
Although the US Securities and Exchange Commission (SEC) has previously rejected spot Bitcoin ETF applications due to concerns about market manipulation, recent information suggests a shift in their stance. The SEC is now posing detailed and technical inquiries about the products of potential spot Bitcoin ETF issuers, indicating a potential move towards approving pending applications. Talks regarding the introduction of spot Bitcoin ETFs in the US have progressed significantly, according to unidentified sources.