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The cryptocurrency market continues to witness some of the most significant developments in recent years. Accordingly, officials from America’s largest options exchange, the Chicago Board Options Exchange (CBOE), have announced that they expect to encounter a new wave of institutional investor interest following the anticipated approval process of spot Bitcoin exchange-traded funds (ETFs).
ETF Process and Market Expectations
CBOE Digital President John Palmer, in an interview with Bloomberg TV on January 2, stated that the approval would open the door to a new concentration of institutional and ultimately individual interest in Bitcoin products. He added that many funds are currently unable to invest directly in Bitcoin. The SEC will have to decide whether to approve the ARK Invest 21 Shares Bitcoin ETF application by the deadline of January 10, which is a week from Palmer’s comments.
Furthermore, Palmer expects a significant increase in Bitcoin-focused investment products following the potential approval of spot ETF services. He also added that institutional players will inevitably show increasing interest in these products to hedge risks:
“It will still be difficult to determine what the investor distribution will look like. However, individual investors will also be seeking this.”
High Interest in ETF Products
CBOE Digital is the crypto department of the exchange that offers crypto futures and options products. The exchange plans to offer Bitcoin and Ethereum futures products to investors on January 11, allowing them to trade contracts without full collateral.
Additionally, some investment funds have started making plans to invest more in spot Bitcoin ETF products after approval. On January 2, the investment fund manager Advisors Preferred Trust included the following details in its prospectus:
“Grayscale Bitcoin Trust, ProShares Bitcoin Strategy ETF, and shares of Bitcoin futures contracts may invest up to 15% of their total assets to indirectly gain exposure to Bitcoin.”
