- Spot Bitcoin ETFs trading will begin in the second quarter of 2024.
- The SEC is expected to approve a similar Ethereum-based instrument.
- AUM of the crypto-product market will rise from $41 billion to $600 billion.
- The integration of traditional finance with the industry will continue.
- The development of Ethereum will lay the groundwork for attracting one billion users.
The exact timing of the launch of spot Bitcoin-ETF remains uncertain, but they are expected to start in the second quarter of 2024. This forecast appears in Hashdex’s 2024 outlook.
?⚡️ In our latest Hash Insider
? Hashdex releases our 2024 #Crypto Investment Outlook
? #SEC continues its work on #spot #bitcoin ETFs
? UK asset managers given go-ahead to launch ‘tokenized’ funds& more!https://t.co/O8uESoYJ03
— Hashdex (@hashdex) December 4, 2023
Experts say that investors will subsequently gain access to a similar Ethereum-based product.
Earlier, the US Securities and Exchange Commission delayed the review of Grayscale’s application to convert the trust based on the second-largest cryptocurrency into a spot exchange-traded fund.
On November 16, the Commission made a similar decision regarding Hashdex and Grayscale proposals to launch a spot ETF based on digital gold. The regulator is currently reviewing 13 similar applications.
Hype around ETFs
In November the word “bitcoin” appeared in 1,074 SEC filings, the highest on record, according to The Block. The figure is 32.6% higher than the previous high in May 2023 (810).
According to Hashdex, approval of the instrument would unlock a U.S. retail and high-net-worth investor market worth $50 trillion — larger than the combined market in Europe, Canada and Brazil. In these jurisdictions, such products already exist.
“For the first time, traditional asset managers with thousands of employees
and trusted brands will offer their clients Bitcoin ETFs. The world’s four largest asset managers [Franklin Templeton, Fidelity, BlackRock, Invesco] with AUM in ~$17 trillion have filed the corresponding applications”, — the report states.Experts explained that this will create conditions for broad acknowledgement of cryptocurrency across distribution channels and among financial advisers, helping digital assets become mainstream as they are integrated into existing channels of distribution and model portfolios.
Market outlook
Analysts expect the AUM of the crypto-product market to rise from the current $41 billion to $600 billion. In addition to the registration of spot exchange-traded funds, drivers will include Congress removing regulatory uncertainty, macroeconomic indicator dynamics, and halving.
Experts also forecast active penetration of TradFi into the crypto industry and its integration. In 2024 they expect further technological improvements that will enable network scaling and lay the groundwork for attracting one billion new users.
Ethereum as a driver
Analysts point to Ethereum as the relevant technical infrastructure. They believe the development of the second-largest cryptocurrency’s ecosystem will mirror the trajectory of internet users.
Earlier, the SEC began soliciting public comments on spot Bitcoin ETFs. Lawyer Scott Johnson saw in this a signal of the regulator’s readiness to approve all applications for the instrument at once by January 10, 2024.
Earlier this year, representatives of the Commission and BlackRock held a meeting, where they discussed the details of a spot exchange-traded fund based on the leading cryptocurrency.
Prior to that, the regulator met with Grayscale’s leadership to discuss converting their Bitcoin Trust into an ETF.