Markets
Crypto Spot ETFs Will Have More Influence on Market Price Action: Canaccord
Bitcoin approval (BTC) and ether (ETH) Spot exchange-traded funds (ETFs) are encouraging, and while digital assets underperformed traditional assets in the second quarter, potential ETF inflows could reverse the recent trend, brokerage Canaccord Genuity said in a quarterly report on Sunday.
Spot ETFs are expected to become a more significant part of cryptocurrency price action, analysts led by Michael Graham wrote.
Canaccord notes that while bitcoin ETF flows have slowed from February highs, institutional adoption is still growing, and “more than 50% of the world’s largest hedge funds are now trading/holding spot BTC ETFs, Major institutions have just begun to disclose holdings and the SEC may soon approve BTC ETF options.”
Retail investors may also look to purchase ETFs to gain exposure to crypto through individual retirement accounts (IRAs) and other tax-advantaged accounts, the report said. Bitcoin spot ETFs were first approved for trading in the US in January this year.
The launch of ether spot ETFs is expected later this summer following SEC approved initial issuer filings last month. The regulator needs to endorse S-1 filings before new products can begin trading. Despite macro uncertainty and the timing of any future interest rate cuts, “favorable post-halving supply and demand dynamics could add to ETF tailwinds for bitcoin,” Canaccord said.
Spot ether ETFs, once they start trading, could also have a positive impact and “should help broaden institutional appetite for other assets,” benefiting the broader crypto ecosystem, the report added.