The U.S. Securities and Exchange Commission (SEC) approving just one spot bitcoin exchange-traded fund (ETF) could trigger a domino effect and cash influx for the crypto market.
An SEC green light is considered the holy grail after years of rejections and delays citing liquidity and manipulation concerns. The recent court win for Grayscale to convert its bitcoin fund (GBTC) into an ETF bolsters hopes the tide is turning.
Industry players estimate SEC approval for top asset managers could bring up to $155 billion into Bitcoin. Research shows this could boost its market cap up to $900 billion and add $1 trillion to crypto overall.
The market exhibited its eagerness last week when a false report of BlackRock’s ETF approval sent Bitcoin soaring 10% in minutes. Though untrue, it underscored pent-up demand for regulated crypto exposure.
Signs point to the SEC warming to the concept, now seeing Bitcoin as mature enough to resist manipulation. Experts feel cautiously optimistic at least one ETF could get approved this year.
Yet legal and regulatory uncertainties remain. Approving large institutional players but not smaller crypto firms may open the SEC to lawsuits. Ongoing debates over whether crypto is a security also complicate matters.
While not a total solution, an ETF could be an olive branch as regulators sort out crypto oversight. Regardless, opening retail access could turbocharge adoption and realize crypto’s mainstream financial dreams.
