Prominent figures in the crypto industry have expressed optimism about increased crypto adoption and a more mature market following the U.S. approval of spot bitcoin ETFs. This move has been hailed as a recognition of bitcoin as a “legitimate asset” by Anthony Scaramucci, former White House communications director and now founding and managing partner at SkyBridge Capital. He also noted that this approval will pave the way for greater mainstream education and acceptance around the merits and utility of blockchain-based assets and infrastructure.
The Securities and Exchange Commission recently announced the approval of 11 spot bitcoin ETFs, set to start trading soon. This has been a significant development, with Richard Teng, the Chief Executive Officer of Binance, describing it as a historic moment for the crypto industry. Spot bitcoin ETFs will provide BTC access to a new class of investors and make Bitcoin a more approachable asset for those who are curious about crypto.
Asset managers such as Grayscale, who have turned their Grayscale Bitcoin Trust into a spot bitcoin ETF, welcome this approval. They have garnered nearly one million investors and amassed over $28 billion in assets under management over the years. In addition, industry leaders like Brian Armstrong of Coinbase and Cynthia Lo Bessette of Fidelity see this approval as a positive momentum for the industry.
However, even as the crypto industry celebrates this approval, there are potential risks to consider. SEC Chair Gary Gensler made it clear that the approval of spot bitcoin ETFs does not signify the commission’s endorsement of bitcoin. Rajeev Bamra of Moody’s Investors Service noted that while the approval could lead to a more stable and liquid crypto market, its sustainability depends on the trajectory of global monetary policy-making and the availability of compliant crypto products for institutional investors.
Yiannis Giokas, a senior director at Moody’s Analytics, pointed out the notorious price volatility of Bitcoin and its fluctuating values against stablecoins and other cryptocurrencies as potential risks for mainstream investors. These risks highlight the importance of informed decision-making and risk management strategies in the evolving landscape of crypto investments.
