Bitcoin awash in fresh cash? - Despite the acceptance of a first bitcoin (BTC) ETF in October 2022, the Securities and Exchange Commission (SEC) blocked the ETF 'place'. However, a resting version of actual bitcoins, not futures contracts, is the only dam holding back a huge wave of institutional investment in the king of cryptocurrencies.
Despite $26 trillion in assets under management, they only dream of bitcoin.
For nearly six months, the gendarme of U.S. financial markets, the Securities and Exchange Commission, has effectively blocked any applications for spot ETFs on bitcoin. These types of exchange-traded funds, known as "spot" funds, involve the holding of an underlying asset, in this case bitcoins.
In fact, the SEC has so far only allowed ETFs based on bitcoin derivatives (futures, or forwards), which are simply indexed to the price of BTC, without the need to actually own them.
However, a recent survey conducted by the NASDAQ exchange among 500 financial advisors shows that investors are very willing to bet on a spot Bitcoin ETF. According to the survey, a huge majority of these financial experts (72%) would be "ready to invest their clients' cash" in cryptocurrencies if a spot ETF was approved in the United States - there are already some in the rest of the world, especially in Canada as of December 2021.
Half of these experts are chomping at the bit on ETFs futures contracts BTC
In total, the investment advisors surveyed control as much as $26 trillion in assets on behalf of their (very) wealthy clients, or 13 times the size of the entire cryptoasset market.
Those who have already bitten into bitcoin in one way or another always want more. Therefore, advisors who have already invested in cryptocurrencies expect 86% to increase their allocations over the next 12 months. Even more optimistic is the fact that exactly 0.00% (none) of these experts intend to reduce their allocations: this is institutional HODL!
Moreover, while desperately waiting for the SEC to decide to accept Bitcoin spot ETFs, these financial advisors are 50% content (hence already invested) in forward ETFs indexed to Bitcoin prices. And another 28% plan to start using them in the next 12 months, if not better.
With a recommended average of 6% invested in cryptocurrencies, one can imagine what the magnitude of this gigantic institutional portfolio mix would be: almost doubling the total valuation of the current cryptoasset market today. We also understand why so many applications for spot BTC ETFs are trying to flood the SEC. Will the dam holding back this flood of institutional money break soon? In any case, the Grayscale Bitcoin Investment Trust (GBTC) is going all in.
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