AB Bernstein, an asset management firm with a $646 billion portfolio, recently made some predictions regarding the approval of a spot bitcoin ETF in the period between October 2023 and March 2024.
Let’s have a look at the details below.
Summary
When to expect the arrival of the bitcoin ETF: some predictions
In the financial sector, few innovations have generated as much interest and excitement as the prospect of crypto exchange-traded funds (ETFs).
Although bitcoin has long been the focus of financial attention, the introduction of crypto ETFs marks the beginning of a new era in investing in a variety of digital assets.
As mentioned above, AB Bernstein, one of the world’s leading asset managers, has made some interesting predictions for the world of cryptocurrencies. Specifically, the firm believes that a spot ETF on bitcoin could receive regulatory approval between mid-October and mid-March 2024.
This news could be a game-changer for the cryptocurrency ecosystem, as an ETF on bitcoin could make it easier for traditional investors to access the cryptocurrency market without having to manage digital assets themselves.
If this prediction comes true, it could lead to increased interest and institutional investment in Bitcoin, further contributing to its adoption and growth in the global financial market.Â
However, it remains to be seen how the momentum will develop in the meantime and whether this prediction will actually come true.
In addition, the Bernstein analysts believe that Grayscale’s recent legal victory against the US Securities and Exchange Commission (SEC) is not just a breakthrough for an individual fund in its evolution towards an ETF.
On the contrary, it lays the groundwork for regulators to consider a wide range of cryptocurrencies in the context of ETFs, opening up new prospects for the market.
Expanding ETFs: Beyond bitcoin
Monday’s report, compiled by Gautam Chhugani, shows that the prospects for crypto ETFs are not exclusively limited to bitcoin (BTC), but extend to a broad landscape of other cryptocurrencies across the industry.
Indeed, as mentioned above, the report predicts that the first bitcoin-based spot ETF will become a reality between mid-October 2023 and mid-March of the following year, marking a significant milestone for the entire cryptocurrency ecosystem.
Bernstein analysts expect this approval to coincide with the approval of all spot ETF applications, including Grayscale’s, next month.
Based on the presumed success of bitcoin ETFs, experts anticipate an increase in demand for Ethereum (ETH) spot ETFs. ETH’s market structure, with the presence of both CME futures and a spot market, positions it as a natural candidate for inclusion in an ETF.
However, Bernstein’s report goes further, suggesting that the development of crypto ETFs does not stop at bitcoin and Ethereum.Â
The asset management industry appears poised to explore opportunities beyond these two core assets, moving into high-end blockchains such as Solana and Polygon.
ETFs: beyond cryptocurrencies and into DeFi?
According to the analyst, the opportunities associated with ETFs could also extend to decentralised finance (DeFi), offering investors additional investment options.
As we know, DeFi is a real revolution in the financial world, offering loans, exchanges and a range of financial services based on blockchain, eliminating the need for traditional intermediaries.
For asset managers, diversification is a major business opportunity. This strategy gives them access to the fast-growing digital asset market, capitalising on the increasing demand and continued expansion of the sector.
The report highlights the ever-changing regulatory landscape for cryptocurrencies, but one trend is clear: crypto ETFs are set to revolutionise the investment world.
Countries such as Brazil, Dubai and Canada have already launched crypto ETFs, and the analyst predicts that the US will follow suit. The move will give cryptocurrencies greater legitimacy as a traditional asset class.
