Canaccord Genuity, in its quarterly report released on Sunday, highlighted the positive implications of the approval of bitcoin (BTC) and ether (ETH) spot exchange-traded funds (ETFs). According to the brokerage firm, while digital assets lagged behind traditional assets in the second quarter, potential ETF inflows have the potential to reverse this trend.
Analysts, led by Michael Graham, emphasized that spot ETFs are poised to play a significant role in shaping the price dynamics of cryptocurrencies moving forward.
Canaccord observed that despite a slowdown in bitcoin ETF inflows from the highs seen in February, institutional adoption continues to grow. The report noted that over 50% of the world’s largest hedge funds are now involved in trading or holding spot BTC ETFs, with major institutions beginning to disclose their holdings. Moreover, the prospect of SEC approval for BTC ETF options looms on the horizon.
Retail investors are also expected to contribute to ETF demand, seeking exposure to cryptocurrencies through individual retirement accounts (IRAs) and other tax-advantaged accounts.
Bitcoin spot ETFs were initially approved for trading in the U.S. in January of this year. Canaccord anticipates the launch of ether spot ETFs later this summer, following recent SEC approvals of initial filings by issuers. These products await final endorsement of S-1 filings before becoming operational.
Despite broader macroeconomic uncertainties and potential future interest rate adjustments, Canaccord remains optimistic about favorable supply-demand dynamics post-halving, which could further bolster ETF adoption for bitcoin.
The introduction of spot ether ETFs is also seen as potentially broadening institutional interest in other crypto assets, thereby benefiting the entire crypto ecosystem, the report concluded.
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