Bitcoin (BTC) is in high demand among institutional investors but is awaiting approval for a spot BTC exchange-traded fund (ETF) to spark a buying rally, according to a blockchain executive at professional services provider Ernst & Young (EY ).
Paul Brody, global blockchain leader at EY, believes that Bitcoin faces significant pent-up demand from institutions due to US regulators not approving a spot Bitcoin ETF for years.
Brody discussed cryptocurrency adoption prospects on CNBC’s Crypto Decrypted on October 23, stating that billions of dollars in institutional money are waiting to flow into Bitcoin once a BTC ETF is approved.
“But none of these other institutional funds can touch this stuff, unless it’s an ETF or some other type of blessed regulatory activity,” the blockchain expert said from EY, adding:
“If you look at people who buy Bitcoin, they buy it as an asset. They don’t buy it as a payment tool. Those who buy Ethereum are buying it as a computing platform for commercial and DeFi transactions [decentralized finance] services.”
Brody’s remarks come as global investors closely monitor the process of regulating cryptocurrencies by the United States Securities and Exchange Commission (SEC), which has so far not approved a single Bitcoin ETF in the cash. A number of companies, including Grayscale Investments, ARK Investment, BlackRock, and Fidelity, have filed multiple Bitcoin ETF products with the SEC and are awaiting a regulatory response.
Grayscale, which in August 2023 won SEC case over one-time review of Bitcoin ETF has recently filed a registration statement in Form S-3 with the SEC to list its Grayscale Bitcoin Trust on the New York Stock Exchange Arca.
According to Eric Balchunas, senior ETF analyst at Bloomberg, a recent amendment to the Bitcoin spot ETF by ARK Invest and 21Shares is a “good sign” of progress and impending approvals. The ETF expert believes that the ETF amendments tabled in mid-October 2023 could be in direct response to SEC concerns asked ETF issuers to respond.