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Grayscale CEO Michael Sonnenshein has restated growing optimism over an investment drive in the cryptocurrency market in the event of a spot Bitcoin (BTC) ETF approval by the Securities and Exchange Commission (SEC).
In a recent CNBC interview, Sonnershein noted that the influx of institutional investors in the market hinged on growing market optimism over a potential ETF approval by regulators.
He stated that many investors are now including BTC in their investment portfolio adding that an approval by the SEC will drive that exposure as the advise market in the United States can potentially open up a $30 trillion window.
“(An approval) will unlock the opportunity for a part of the investment community that got worse has been locked out of the opportunity of participating and having Bitcoin in their portfolios; we’re talking about the advise market here in the US, which is today about $30 trillion worth of advised wealth.”
In recent times, many analysts have speculated a surge in Bitcoin price and a new financial cycle in the market on the heels of an ETF. Notably, this anticipated surge drives inflows into Bitcoin institutional products driving up the Assets Under Management (AUM).
🗣️ Some of the global financial industry’s largest market-makers might jump in to provide liquidity for @BlackRock if the firm’s spot Bitcoin ETF application is approved by the @SECGov.#CryptoNews #BTC #ETFhttps://t.co/s8GndeqQwV
— Cryptonews.com (@cryptonews) October 31, 2023
Industry leads remain bullish
On Dec 19, MicroStrategy’s Michael Saylor commented that a Bitcoin ETF would be the biggest development on Wall Street in 30 years. He explained that an ETF will open a new door of investment adding that 2024 is going to be a major bull run for the asset class.
“I don’t think we’ve ever seen a 2 to 10x increase in demand combined with a halving in supply in a scarce, desirable asset that people want to hold for a long period of time.”
Steven Schoenfield, the CEO of MarketVector projects an additional $200 billion in the market in a few months while AllianceBernstein predicts an inflow of $650 billion in crypto assets under management should BlackRock’s application receive a regular nod.
Micro and macroeconomic factors affect BTC price
Sonnenshein reflected on the price appreciation of Bitcoin since the start of the year which has recorded a 166% year-to-date (YTD) growth. Pointing to both micro and economic factors, he added that inflationary pressure has led investors to Bitcoin as a hedge in their potential and the recent court victory Grayscale picked up against the SEC.
This year, BTC products have posted institutional inflows of $1.6 billion with an AUM of $36 billion picking up after a slow start to the year while the total cryptocurrency market’s AUM stands at $50.2 billion.
On the other hand, Senator Jamie Dimon criticized cryptocurrencies saying the only use case is money laundering for criminals and drug traffickers. In response, Sonnenshein maintained a bullish stance stating that lawmakers and politicians can hold personal opinions on new technologies. Still, laws will shape the use of new developments like Bitcoin giving investors access.
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