Bitcoin ETFs: What to Anticipate on Launch Day
Spot bitcoin ETFs have finally been approved in the U.S. after a decade of trying. The next step is the launch and trading of these highly anticipated products on U.S. markets by the NYSE, Cboe Global Markets, and Nasdaq, with major trading firms providing liquidity.
The trading could potentially start as early as 4 a.m. ET (09:00 UTC), coinciding with the opening of U.S. stock exchanges. The introduction of these products will allow retail customers to gain exposure to bitcoin’s price through their conventional brokerage apps and accounts, as well as enabling traditional financial institutions to invest without the need for crypto exchanges.
Cynthia Lo Bessette, head of digital asset management at Fidelity, one of the bitcoin ETF issuers, expressed that these ETFs offer investors interested in digital assets more choices compared to the previously approved bitcoin futures ETFs. She emphasized Fidelity’s commitment to meeting the growing demand and providing secure access to markets.
Similarly, Cboe Global Markets highlighted that the ETFs would provide investors with a transparent and regulated way to track bitcoin’s price, signaling a significant step forward in establishing cryptocurrencies as a tradeable asset class.
With 11 spot bitcoin ETFs being offered, liquidity providers and market makers have been preparing for this launch and ensuring the efficiency of the bitcoin market. The spot ETFs’ liquidity will be supported by bitcoin’s spot market, futures markets, and futures ETFs. NYSE has implemented various liquidity programs to facilitate a dynamic and liquid market on the launch day.
BlackRock, the asset manager involved in bitcoin ETFs, mentioned its partnership with Coinbase and integration of Coinbase Prime with its own portfolio management tool, Aladdin. While BlackRock did not disclose specific assets under management at launch, the company has shown long-term commitment by making a significant seed investment in the ETF.
Despite the expected excitement on the launch day, industry experts anticipate a gradual ramp-up in interest and investments. Investors might take time to review and become comfortable with the bitcoin ETF vehicle before allocating funds. Wealth advisers, who could be a major investment channel, will need to go through a journey of education and suitability conversations with their clients.
In conclusion, the launch of bitcoin ETFs in the U.S. is a significant milestone for the cryptocurrency market. It opens up new opportunities for investors and institutions, providing them with regulated exposure to bitcoin’s price and potentially paving the way for further adoption of digital assets as an investment class.