The traditional structure of Spot Bitcoin ETFs may be reaching its peak.
Mauricio Di Bartolomeo, co-founder and chief strategy officer at Ledn, expects a shift beyond vanilla ETFs. It is expected that this will include a wide range of crypto assets within one investment vehicle in the coming year.
The Ledn CEO said he sees a clear regulatory path for ETFs, lending legitimacy to cryptocurrencies through their existence. He said that the participation of established institutions such as BlackRock is particularly important because they have influence in the financial markets and have a vested interest in the success of their products.
In an interview with CryptoNews on Thursday, Bartolomeo suggested that Ethereum will be the last single-asset cryptocurrency that traditional institutions consider “ETF-worthy” due to a lack of credibility with others — for now.
However, he expects several new variations of ETFs to emerge, specifying the order in which they are expected to arrive.
“For me, it's like this: Bitcoin, Ethereum ETFs [spot] ETFs… And then you'll start seeing 2x Bitcoin ETFs, Short Bitcoin ETFs, 3x Ethereum ETFs, and Bitcoin plus Ethereum ETFs. “All kinds of combinations of these things,” he said. He believes that these new forms of ETFs will take center stage before any other cryptocurrency qualifies for single-asset ETFs.
The success of Bitcoin ETFs paves the way for the explosive growth of hybrid products
He explained that the success of ETFs based on spot trading will lead to the explosion of many hybrid ETFs. The cryptocurrency's price recently surpassed $52,000, supported by its restored $1 trillion market cap and continued inflows into existing spot ETFs.
Notably, BlackRock's iShares Bitcoin Trust has impressive momentum, adding more fuel to optimism about Wall Street's embrace of these financial instruments.
“As an exporter, this is a huge success,” Bartolomeo said. “You have nine issuers, and four of them have more than $1 billion in assets. Any one of those launches alone would have been the best launch of the year. And now you have five ETFs doing the same thing and they're all winning.”
“Will they stop? Probably not. They have probably already applied for the 2x Bitcoin ETF.”
Bitcoin ETFs are bigger than most bulls thought. Ethereum ETFs are next. The difference is that ETH is smaller and more centralized. Blackrock and the banks will soon have full control of Ethereum. Only BTC is decentralized enough.
– Mike Alfred (@mikealfred) February 16, 2024
ProShares and Bitwise lead multi-asset cryptocurrency ETF fees
ETF issuers such as ProShares and Bitwise have already joined the race. Both filed applications with the US Securities and Exchange Commission last year for an ETF focused on bitcoin and ether, called the Bitcoin and Ether Equal Weight Strategy ETF.
According to Proshares, the ETF will measure “the performance of holding long positions in the closest monthly outstanding Bitcoin and Ether futures contracts.”
