Institutional Demand for Bitcoin Soars, Awaits ETF Approval

David – Cryptocurrency Enthusiast

In the realm of latest cryptocurrency news, institutional interest in trusted Bitcoin is intensifying. Ernst & Young (EY), a prominent professional services firm, suggests that the cryptocurrency may experience a surge in demand once a spot Bitcoin exchange-traded fund (ETF) is approved.

Bitcoin's current standing at $34,087 reflects its immense appeal among institutional investors. Paul Brody, EY's Global Blockchain Leader, suggests that there's a vast amount of accumulated institutional demand for digital assets. This pent-up interest is primarily due to the US regulators' prolonged delay in granting approval for a spot Bitcoin ETF.

Speaking on CNBC's Crypto Decrypted on October 23, Brody shared insights on the future of cryptocurrency investment. He emphasized that institutional money, potentially in the trillions, is poised to flow into Bitcoin as soon as the BTC ETF gets the green light. However, Brody highlighted the current limitations, stating, "Institutional funds won't engage with this asset unless there's an ETF or another legal cryptocurrency instrument."

Distinguishing the intentions behind acquisitions, Brody explained, "Investors are treating Bitcoin primarily as an asset. They aren't purchasing it as a transactional medium. In contrast, those investing in Ethereum view it as a foundational system for business dealings and decentralized finance (DeFi) applications."

Amid this backdrop, the global investment community is keenly observing the United States Securities and Exchange Commission's (SEC) moves. Up to now, the SEC hasn't sanctioned a single spot Bitcoin ETF. Many heavyweight firms, such as Grayscale Investments, ARK Investment, BlackRock, and Fidelity, have lodged applications for various Bitcoin ETF products, all eagerly waiting for the SEC's verdict.

In a noteworthy development, Grayscale, after triumphing in an SEC lawsuit related to a spot Bitcoin ETF review in August 2023, has filed an S-3 form registration statement. Their objective is to enlist the Grayscale Bitcoin Trust on the New York Stock Exchange Arca.

In line with this, Eric Balchunas, a senior ETF analyst at Bloomberg, perceives the recent modifications to the spot Bitcoin ETF by ARK Invest and 21Shares as positive indicators. He surmises that these adjustments, introduced in mid-October 2023, may address the specific concerns raised by the SEC.