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Spot Bitcoin ETFs Set to Revolutionize the 150-Strong Crypto ETP Landscape

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Spot Bitcoin ETFs Set to Revolutionize the 150-Strong Crypto ETP Landscape

BitMEX Research has unearthed data indicating that the cryptocurrency exchange-traded product (ETP) market, currently boasting about 150 products with a combined value of $50.3 billion, is on the brink of a seismic shift. The imminent introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States could significantly surpass the entire crypto-related ETF market’s current valuation.

As of now, the global market for crypto ETPs, which includes both spot and futures funds, is dominated by products that track the performance of major cryptocurrencies like Bitcoin and Ethereum. Grayscale’s Bitcoin Trust, which is in the process of converting into a spot ETF product, stands as the largest ETP in this category.

Anticipated Impact of Spot Bitcoin ETFs

The crypto investment sphere is abuzz with predictions regarding the approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC), speculated to happen as early as January 10. Analysts from Bitwise have projected that spot Bitcoin ETFs could amass up to $72 billion in assets under management within the next five years, effectively doubling the current market size. In contrast, Van Eck, a global fund manager, presents a more conservative estimate, foreseeing around $2.4 billion flowing into these products in the first quarter of 2024.

While the U.S. is yet to approve a spot Bitcoin ETF, such products are not novel in the global market. Countries like Canada, Australia, and Germany already offer investors the opportunity to invest in spot Bitcoin ETFs. The growing institutional interest in crypto investment products is evident from the $1.6 billion year-to-date net inflows into crypto ETFs worldwide, with a significant surge in November 2023.

Also Read – Will Bitcoin ETFs Ignite a 2024 Bull Run or Collapse?

Dominance of Top 20 Crypto Funds

Among the 150 crypto funds, the top 20 ETFs have attracted the most investment, with $1.3 billion flowing into them over 2023. Notably, the ProShares Bitcoin Strategy ETF (BITO), which launched during a crypto bull market in October 2021, experienced the largest individual inflows, adding $278.7 million in 2023.

In preparation for the anticipated SEC approval of spot Bitcoin ETFs, BitMEX Research has compiled what they believe to be a near-exhaustive list of existing crypto-related exchange-traded products. This list, as of December 22, 2023, includes around 150 products with a total asset value of $50.3 billion. BitMEX Research acknowledges the possibility of minor inaccuracies and invites corrections to ensure the data’s precision.

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