The crypto market could see a surge of capital inflows if the U.S. Securities and Exchange Commission (SEC) approves Bitcoin exchange-traded funds (ETFs), according to CryptoQuant, a blockchain analytics firm.
CryptoQuant CEO Ki Young Ju said that Bitcoin ETFs would attract institutional investors who are looking for exposure to the leading cryptocurrency without the hassle of custody and security issues. He estimated that the crypto market cap could increase by $1 trillion if Bitcoin ETFs are approved.
“Bitcoin ETFs will be a game-changer for the crypto industry. They will lower the barriers to entry for institutional investors and increase the liquidity and efficiency of the market. I think we can expect a huge increase in the demand and price of Bitcoin once ETFs are available,” he said.
Bitcoin ETFs are funds that track the price of Bitcoin and trade on traditional stock exchanges. They allow investors to buy and sell Bitcoin without having to own or store the actual coins. Currently, there are no Bitcoin ETFs in the U.S., but several firms have filed applications with the SEC, hoping to get the green light.
The SEC has repeatedly delayed or rejected Bitcoin ETF proposals in the past, citing concerns over market manipulation, fraud, and investor protection. However, some analysts believe that the SEC may be more open to approving Bitcoin ETFs under the new leadership of Gary Gensler, who has expressed interest and expertise in crypto.
The first Bitcoin ETF in North America was launched in Canada earlier this year, and it has seen strong demand and growth. The Purpose Bitcoin ETF (BTCC) has amassed over $1.3 billion in assets under management since its debut in February. Other countries, such as Brazil and Dubai, have also approved Bitcoin ETFs recently.
CryptoQuant’s Ju said that he expects the U.S. to follow suit soon and approve Bitcoin ETFs in the near future. He said that this would be a bullish catalyst for the crypto market and help Bitcoin reach new highs.