The chief strategy officer of market intelligence firm CoinShares believes that the potential approval of spot market Bitcoin (BTC) exchange-traded funds (ETFs) in the coming days will not be a bearish event for the leading crypto asset.
In a new CNBC Television interview, Meltem Demirors says that investment flows into crypto exchange products (ETPs) indicate relentless demand for Bitcoin.
According to Demirors, the approval of spot-based Bitcoin ETFs will likely lead to billions of dollars in capital flowing into BTC.
“I don’t think this is a sell-the-news event and here is why. Let’s just talk about the flows… If we look at what happened last year, in the last week of 2023, $243 million of flows into crypto ETPs primarily Bitcoin, $2.2 billion for the year last year. It’s not stopping.
There’s demand for Bitcoin. When these new products launch, we’ve heard there’s one issuer that’s seeding their fund with $200 million. Rumors now that BlackRock is coming in with $2 billion. All of that leads to buying of Bitcoin, at least to demand for Bitcoin. So I don’t think it’s a sell-the-news event because Bitcoin is limited in supply. That’s one of the really interesting, unique properties of it.”
Looking at the broader crypto markets, Demirors thinks that the conditions are not yet ripe for asset managers to start issuing ETFs based on riskier digital assets.
“I think when it comes to other crypto assets, it’s going to take some time just because there isn’t that long track record… Bitcoin has been around for a long time, battle-tested. The markets are very deep, very liquid. We don’t really see that in the longer tail of crypto assets.
But what we do know is there’s tremendous investor demand. Today, there is over $50 billion in global AUM (assets under management) across crypto ETPs. Now, $38 billion of that, or over 75% is in Bitcoin. But the next $10 billion [is in] Ethereum. Then we’ve got Solana, very popular this recent year, and a long tail of others.
But I do think it’s just going to take some time for the market to get comfortable.”
At time of writing, Bitcoin is trading for $44,100.
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