Bloomberg analysts predict the crypto exchange-traded funds may find their approvals with regulators soon, even as the US crypto regulatory scene improves.
Exchange-traded funds (ETFs) have been a popular investment vehicle in the financial world. Both institutional and retail investors have flocked to ETFs in the global equity and debt markets. The crypto industry is also keeping up with the trend rapidly. Global investing firms have filed multiple crypto exchange-traded funds applications in the US this year.
The crypto market has also witnessed an extremely bullish year so far. Bitcoin has risen by more than 70%, propelling the entire market along with it.
At the same time, the crypto regulatory scenario in the United States has seen mixed trends in 2023. Multiple legal suits had lined up in courts. Most of them ensued between crypto firms and regulators in the country. The repeated legal battles had also hindered the growth of the crypto market, although temporarily.
However, the crypto regulatory scene showed a dramatic improvement at the end of July. US lawmakers passed multiple crypto bills, which the industry appreciated as well. The industry could have experienced significant relief after prolonged regulatory uncertainty.
With the move, market sentiments have also changed for the better. The Bloomberg analysts’ prediction also aligns with the upward market movements. The ETF analysts James Seyffar and Eric Balchunas are optimistic about the prospects of the crypto ETFs.
They believe the chances for approval have increased to 65% with the recent developments in the US. They said,” Based on recent events and new information Eric Balchunas and I are officially increasing our spot Bitcoin ETF approval odds to 65%. That’s from 50% a couple weeks ago and 1% a few months ago.” A spot Bitcoin ETF could be beneficial for Bitcoin in several ways. For instance, it could increase investors’ money inflows into the crypto market.
With retail investors investing in crypto through ETFs, market liquidity could surge to record highs. The market is currently tight on liquidity after the Federal Reserve has raised interest rates multiple times.
Europe, as usual, is far ahead on the crypto train. The United Kingdom has started utilizing blockchain technology for a host of aspects. The development of the digital pound and crypto regulation is also moving ahead rapidly.
The European Union has seen the Markets in Crypto-Assets Act cast regulatory clarity across the region. The European Securities and Markets Authority has also released consultation papers on the act’s standards. The consultations will stretch across phases this year.
The Bloomberg analysts believe once the legal aspects are handled, most of the filings will be approved by regulators. That could trigger a series of positive effects on the crypto industry and its ecosystem. The benefits may also spill over to the crypto market.