CoinShares’ chief strategy officer believes that the potential approval of spot Bitcoin (BTC) exchange-traded funds (ETFs) in the coming days will not be a bearish event for the leading cryptocurrency.
Potential ETF Approval for Bitcoin
In a new CNBC interview, Meltem Demirörs stated that the relentless demand for Bitcoin is evident from the investment flows into crypto exchange-traded products (ETPs). According to Demirörs, the approval of spot-based Bitcoin ETFs could likely lead to billions of dollars flowing into BTC. The senior analyst said:
I don’t think this is a ‘sell the news‘ event, and here’s why. Let’s talk about flows… Looking at last year, in the last week of 2023, there was a $243 million inflow into crypto ETPs, primarily Bitcoin; $2.2 billion for the year. There’s demand for Bitcoin. When these new products are launched, we heard about one issuer’s fund bringing in $200 million. Now there are rumors that BlackRock could bring in $2 billion. All this leads to buying Bitcoin, at least to demand for Bitcoin. So I don’t think this is a ‘sell the news’ event because Bitcoin’s supply is limited. That’s one of its really interesting, unique features.
Critical Commentary from an Expert
Looking at the broader crypto markets, Meltem Demirörs believes that conditions are not yet ripe for token managers to start issuing ETFs based on more risky cryptocurrencies. The expert commented:
As for other cryptocurrencies, I think it will take some time because they don’t have such a long history of performance… Bitcoin has been on the market for a long time and is battle-tested. The markets are very deep, very liquid. We don’t see this in the long tail of crypto assets. But what we do know is that there is tremendous investor demand. Today, the global AUM (assets under management) in crypto ETPs is over $50 billion. Now, $38 billion of that, or more than 75%, is in Bitcoin. But the next $10 billion is in Ethereum. There’s also a long tail of others that have been very popular in recent years, like Solana. However, I think it will take some time for the market to settle down.
At the time of writing, the leading cryptocurrency, Bitcoin, is trading at $44,100.
