Last Updated on 3 weeks by cryptoevent
Coinbase suggests that the introduction of spot bitcoin exchange-traded funds (ETFs) in the United States could broaden the investor base for cryptocurrencies. If approved, these ETFs are anticipated to attract new categories of investors, such as registered investment advisers (RIAs), retirement funds, and institutions that have traditionally been unable to participate in the crypto market.
The potential impact extends beyond the influx of new capital. According to David Duong, Coinbase’s Head of Institutional Research, spot ETFs have the capacity to alleviate restrictions for large money managers and institutions, facilitating the purchase and long-term holding of bitcoin. This, in turn, is expected to enhance liquidity and contribute to better price discovery for all participants in the market.
Furthermore, the establishment of investment vehicles meeting regulatory and compliance standards is seen as a gateway to new financial products. This expansion could lead to a variety of crypto offerings for accredited investors, potentially increasing the overall market cap of the cryptocurrency sector by billions of dollars.
Coinbase envisions that the approval of spot ETFs will set the stage for a more regulated crypto market, fostering greater inclusion and sparking a substantial rise in demand. The report also emphasizes that against a backdrop of increasing geopolitical tensions and economic uncertainties, the timing of this development is opportune. With disruptions in the U.S. Treasury bond market and vulnerability in the banking sector, bitcoin is portrayed as an appealing alternative within the traditional financial system as 2024 approaches.