Thursday, September 16

Can Bitcoin (BTC) ETFs Meet US Demand?

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BTC ETF 1

Bitcoin (BTC) ETFs have performed pretty well in Canada. However, the Canadian market is one tenth the size of the US market. Therefore, it is unclear whether Bitcoin ETFs will be able to meet the US demand.

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For digital assets to impact the US mainstream, the industry needs to be a more “frictionless” path for investors.

Although there are similar examples such as Coinbase and Grayscale Bitcoin Trust, we cannot say that they have fully influenced the mainstream.

Speakers at the Consensus virtual event note that although ETFs act as a bridge between the two worlds, there are still regulatory and scalability obstacles on the way.

Canada Has Succeeded

According to users who joined the panel, these blockers are misled. In fact, Bitcoin ETFs launched in Toronto can be considered successful.

Investors’ interest in products has raised Purpose Investments BTCC’s AUM to over $ 1 billion. In the first weeks after the initial listings, Canada’s ETF sector saw the highest monthly inflows of capital ever. While these ETFs can meet Canada’s demand, the problem of scaling to meet demand from the world’s largest and most mature market remains.

In fact, parallels can be drawn between Bitcoin EFTs and gold ETFs, said Som Seif, a panelist who is the founder and CEO of Purpose Investments.

“There is always a supply and demand function issue in any asset category, and ETFs work really well when an asset can meet demand.”

There is retail demand for bitcoin, and people will “find a way to have this thing the way they want.” Grayscale, despite all its flaws, achieved considerable success.

Volatility Problem

In addition to infrastructure problems, the SEC is also concerned about price volatility. In theory, the rapid dips in the price of an asset as well as significant rapid recoveries have the potential to break a few circuits and blow some fuses. But looking back, looking at the most recent collapse and the subsequent price recovery, the situation is not entirely clear.

ETF Trends research director Dave Nadig said there has been no major disruption since last week’s crash, which is reassuring for regulators.

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