The crypto market is holding its breath. Mike Novogratz, boss of the giant Galaxy Digital and candidate for the launch of a Bitcoin ETF in the United States, has just announced in an interview that “great things are to come”. A cryptic but promising statement regarding the Bitcoin ETF saga which has lasted for almost 10 years.
The Bitcoin ETF, the Holy Grail for American investors
Since 2013 and the launch of the first Bitcoin ETF in Canada, American investors have demanded the approval of such an investment instrument by the stock market watchdog, the SEC. The principle ? An index fund that replicates the price of bitcoin, without having to purchase the crypto-asset directly.
Several companies have filed an application in recent months, such as Fidelity, SkyBridge and Valkyrie. Galaxy Digital, the Novogratz firm, is also a candidate, in partnership with Bloomberg.
The challenge is colossal: making investment in bitcoin more accessible to institutional investors, who represent billions of dollars in potential new capital. Hence the market’s impatience after nearly a decade of waiting.
The discreet optimism of the American authorities
Although no specific date has emerged regarding the future approval of a Bitcoin ETF, several signals suggest that the lights could soon turn green. SEC Chairman Gary Gensler is more open to cryptocurrencies. The Fed itself has acknowledged that bitcoin can be considered a legitimate digital asset.
Above all, the White House published a report in September 2022 favorable to a more flexible regulatory framework. She salutes the technological innovation of digital assets as well as their potential applications. A notable change in discourse compared to previous administrations.
The recent enthusiastic statement from the CEO of Galaxy therefore seems to confirm this cautious optimism regarding a possible upcoming approval. For the American crypto ecosystem, this would be a historic step.
A potentially considerable impact
It is still difficult to precisely predict the impact of a green light from the SEC. But there is no doubt that billions of dollars of institutional investments could flow into bitcoin, causing its price to soar.
In Canada alone, the four existing Bitcoin ETFs total more than $1.5 billion in assets. And Fidelity estimated in 2021 that if only 1% of American institutional portfolios were allocated to bitcoin, that would represent $600 billion.
With this cryptic but promising statement, the boss of Galaxy Digital further strengthens the wild hope of American investors. Approval of a Bitcoin ETF appears to be just a matter of months away, which would mark a major endorsement for digital assets from authorities. The long-awaited baptism of digital gold on Wall Street could be approaching.
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