How Would a Potential Bitcoin ETF Nod Change the Market?

Token Bay Capital Lucy Gazmararian for digital
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[CC may contain inaccuracies] What do you expect to happen with Bitcoin ETF? We have heard the likes of some analyst thinking that the applications will fall short of the requirements by the FCC. I mean, I think overall the the

Expectation is almost at 90% that we are going to get an approval next week. But of course, there is room for for that not to happen. Right. And and it doesn’t get approved. We did have one analyst say that in Asia, and that just led to a selloff of

Bitcoin around the world. You know, it’s very jittery with these expectations. There’s really late laser focus on Bitcoin’s price right now. So, you know, it’s always been a volatile asset, but I think there’s so much focus on the price right now that

It can make it move even more, jumping around even more than it usually does. That’s sort of exactly one of the reasons why regulators have been hesitant about these products. Right. I mean, that ordinary investors might not be able to stomach all of that volatility, not to mention the potential for market manipulation.

So what’s changed? I think that’s exactly right. I mean, it’s going to be, I think, very interesting to see what’s in the disclosures, you know, what’s in the small print for investors to read before they go ahead and invest in these types of products, because the volatility is

Really extreme. And that’s been a characteristic of Bitcoin right, from its inception. I think we have to remember that Bitcoin is still only 15 years old. It’s a very new asset and it’s really the lead asset in an entirely new emerging asset class of cryptos in more

Generally. And so this volatility, it’s it’s a characteristic, it’s a feature, it’s not a bug, and it’s got to be something that investors are informed about so that they know how to place it and invest in it and have it as part of their asset allocation.

You know, treat it in the way that it’s supposed to be treated, which at the moment advisors are saying have a very small part of your overall portfolio in a volatile asset like Bitcoin, because while the upside is is very appealing and we’ve obviously seen historic returns coming from Bitcoin as an asset

Class, that drawdowns can be particularly painful. So as always with investors looking at an investment timeframe and looking at your overall asset allocation when it comes to Bitcoin, the reason that we had this tear on crypto assets leading up to this announcement by VCs, the

Expectation that we’ll get a new wave of investors, of different sets, of investors being having access to cryptocurrencies. Right. Tell us a little bit about how mainstream these crypto tokens have become and how much of a game changer this ETF would be. So to date, really what we’ve seen with

Bitcoin and more broadly in the crypto space and industry is it’s really been really retail driven. So it’s it’s bottom up, it’s retail driven. That’s how Bitcoin came to be in the world. Actually, it’s through bottom up organic growth. It wasn’t the institutions coming in, it

Was not top down. So what we are likely to see with the Bitcoin ETF has continued retail flows because ETFs make that far more accessible. I think the sticking point with a lot of retail investors when it comes to Bitcoin and cryptos in general is how to

Access it. You know, investors, retail investors are not familiar with the crypto exchanges, how to onboard board onto these new financial institutions. You know, it’s not broadly available in brokerage accounts and that’s about to change. So it’s going to become much easier for retail.

But the big shift that we’re likely to see with this ETF is the passive institutional flows that can now start moving into this asset class. And they may move into Bitcoin as a standalone investment or it’s part of the overall asset allocation for any institutional portfolio.

So that’s really going to move the needle and that’s why everyone’s getting so excited at this moment because it’s this upcoming era of institutionalized crypto.