Markets
Spot Cryptocurrency ETFs to Have Greater Influence on Market Price Action: Canaccord
Bitcoin Approval (BTC) and ether (ETH) The trend in spot ETFs is encouraging, and while digital assets underperformed traditional assets in the second quarter, potential ETF inflows could reverse the recent trend, broker Canaccord Genuity said in a quarterly report released Sunday.
Analysts led by Michael Graham wrote that spot ETFs are expected to become an increasingly significant component of cryptocurrency price action.
Canaccord notes that while bitcoin ETF inflows have slowed from their February highs, institutional adoption is still growing, with “more than 50% of the world’s largest hedge funds now trading/holding spot BTC ETFs, major institutions have just begun disclosing holdings, and the SEC may soon approve BTC ETF options.”
Retail investors may also look to buy ETFs to gain exposure to cryptocurrencies through individual retirement accounts (IRAs) and other tax-advantaged accounts, the report said. Spot Bitcoin ETFs were first approved for trading in the United States in January of this year.
Spot Ether ETFs Expected to Launch Later This Summer After SEC approved issuers’ initial filings last month. The regulator must approve the S-1 documentation before the new products can begin to be marketed. Despite macroeconomic uncertainty and the timing of any future interest rate cuts, “favorable supply and demand dynamics post-halving could increase bitcoin ETF tailwinds,” Canaccord said.
Spot ether ETFs, once they begin trading, could also have a positive impact and “should help broaden institutional appetite for other assets,” benefiting the broader crypto ecosystem, the report added.