Europe’s First Bitcoin Spot ETF Goes Live, U.S. Lags Behind
Jacobi Asset Management’s bitcoin spot exchange-traded fund (ETF) has finally launched in Europe, becoming the first of its kind in the continent. The approval and launch of the ETF demonstrate Europe’s progress in integrating crypto assets within traditional financial instruments. Meanwhile, the U.S. Securities and Exchange Commission (SEC) has been slow in approving similar applications, causing delays in the market.
Europe’s First Bitcoin Spot ETF Goes Live, U.S. Lags Behind
Jacobi Asset Management’s bitcoin spot ETF has gone live in Europe, marking a significant milestone in integrating crypto assets into traditional financial instruments on the continent. It highlights the progress Europe is making, unlike the U.S., where the SEC has been delaying the approval of similar applications. The spot ETF actually purchases and holds the underlying assets, making it a more popular approach than futures-related ETFs. While bitcoin futures ETFs do exist in the United States, they account for a relatively small portion of total assets under management.
The Difference Between Spot and Futures ETFs Explained
The main difference between a spot ETF and a futures ETF is that a spot ETF purchases and holds the underlying assets, while a futures ETF invests in contracts that speculate on the future price of the asset. Spot ETFs are more popular because they give investors direct exposure to the asset they are interested in. For example, spot gold ETFs have consumed the majority of gold ETF activity. Similarly, a bitcoin spot ETF can attract significant trading activity and provide a gateway for investors seeking exposure to crypto assets.
Bitcoin Spot ETF Could Unlock Trillions of Dollars for Crypto
A bitcoin spot ETF could potentially unlock trillions of dollars for the crypto market. It will provide a portal for a large amount of money managed by financial advisors that may not have previously considered investing in bitcoin. Eric Balchunas, senior ETF analyst at Bloomberg, compares it to hot sauce, where it’s a small addition to a portfolio. This move could bring in a substantial amount of money, as financial advisors in the U.S. manage around $30 trillion.
Competitors Race to Launch Bitcoin Spot ETF in the U.S.
In the U.S., about 10 firms are racing to get approval for the first bitcoin spot ETF. BlackRock, with its significant assets under management of over $9 trillion, filed for its own offering in June. The firm also partnered with Coinbase in 2022 to provide institutional clients with cryptocurrency access. The competition is fierce, and the question remains when the SEC will approve a bitcoin spot ETF and how many it will approve at once. Bloomberg analysts estimate a 65% chance of approval by the end of the year, with even higher odds for next year.
Will the SEC Approve a Bitcoin Spot ETF by the End of the Year?
The SEC’s approval of a bitcoin spot ETF is eagerly anticipated by many in the market. It could be a game-changer, connecting trillions of dollars in financial advisor-managed assets to the world of cryptocurrencies. The approval would allow investors who have been hesitant to enter the crypto space to gain exposure through a regulated and familiar financial instrument. While the odds of approval are looking positive, it remains to be seen when exactly the SEC will make a decision and how many bitcoin spot ETFs will be approved simultaneously.
The launch of Europe’s first bitcoin spot ETF indicates the progress being made in integrating crypto assets into traditional financial instruments. While the U.S. lagged behind in approving similar applications, several firms are now competing to be the first to launch a bitcoin spot ETF in the country. The potential approval of a bitcoin spot ETF by the SEC could open the floodgates for trillions of dollars to enter the crypto market, providing a regulated and familiar entry point for investors. The industry awaits the SEC’s decision, which is expected by the end of the year or early next year.
Analyst comment
Positive
As an analyst, the launch of Europe’s first bitcoin spot ETF is a positive development that highlights the progress Europe is making in integrating crypto assets into traditional financial instruments. The approval and launch demonstrate a growing acceptance of cryptocurrencies in mainstream finance. This could potentially attract significant trading activity and open the floodgates for trillions of dollars to enter the crypto market. The SEC’s anticipated approval of a bitcoin spot ETF in the U.S. could further boost market growth.
