Bernstein suggests Bitcoin Spot ETF Approval Could Trigger a Surge in Market Uptrend

Investors worldwide are anxiously awaiting the decision of the United States Securities and Exchange Commission (SEC) regarding the approval of a Bitcoin spot exchange-traded fund (ETF). This decision has the potential to be a groundbreaking moment for cryptocurrencies. The SEC has two options: either take more time to make a decision or outright reject the ETF applications. While rejection is a possibility, many investors are predicting a delay.

Notable figures such as Cathie Wood of ARK Innovation and BlackRock have shown interest by filing for a Bitcoin ETF. However, the SEC has already postponed Cathie Wood’s Ark 21Shares Bitcoin ETF application by several weeks. This raises the question: If these ETFs are approved, how could they benefit the world of cryptocurrencies? Let’s delve deeper into the details.

According to a recent report from brokerage firm Bernstein, the approval of Bitcoin ETFs could usher in a new phase of growth for the cryptocurrency market. The report suggests that these ETFs could drive demand in the market and signify regulatory acceptance, attracting both retail and institutional investors. Global asset managers are already keen on Bitcoin spot ETFs and are working on strategies to address the SEC’s concerns. This increased interest raises the likelihood of approval, as per analysts led by Gautam Chhugani.

Bernstein predicts the emergence of a robust market for spot Bitcoin ETFs, potentially comprising 10% of Bitcoin’s total market capitalization within two to three years. This presents a strong potential source of new capital that could fuel a fresh cycle of growth in the crypto market. Possible sources of this new capital include the introduction of a new stablecoin supply, tokenization of traditional assets, growth in native crypto infrastructure tokenization, and the expansion of ETFs. Major companies like PayPal, Amazon Pay, Google Pay, Stripe, and Apple Pay could also enter the crypto space by launching their own coins, further intensifying the market.

It is worth noting that on-chain assets have remained within a $40 billion range this year, while stablecoins’ circulation has reached approximately $120 billion. This suggests the injection of these assets into the cryptocurrency ecosystem. However, the impact on Bitcoin’s price seems to be relatively stable, with the price hovering around the $30,000 level for the past two months.

Overall, Bernstein maintains a positive outlook on Bitcoin ETFs, despite the SEC’s delay in evaluating filings from large firms like BlackRock and Fidelity Investments. The firm anticipates that these ETFs will benefit from strong branding efforts by major asset managers and wider distribution through retail brokers and financial advisors. The decision of the SEC regarding the Bitcoin spot ETFs will certainly have a significant impact on the future of cryptocurrencies.