Ten spot bitcoin exchange traded funds came to market last month, increasing access to the largest cryptocurrency for scores of advisors and investors. While that event is obviously pertinent to bitcoin itself, there are derivative beneficiaries.
Those may potentially include equity-based funds such as the Amplify Transformational Data Sharing ETF (BLOK). The actively managed BLOK is home to 55 holdings, plenty of which are described as “crypto-correlated.” That means when bitcoin, because it’s the largest digital asset, rises (or falls), some BLOK holdings feel the effects.
Spot Bitcoin ETFs Could Boost BLOK
In the U.S., spot bitcoin ETFs are roughly a month old. The jury is still out on how these funds are affecting the market for cryptocurrency. However, there are already signs that the new ETFs are providing fresh buying activity.
Over the long haul, that’s clearly a positive catalyst for bitcoin prices. It’s possible for dedicated bitcoin ETFs to benefit non-dedicated peers such as BLOK. Factors potentially add to the near-term case for BLOK. For example, while bitcoin prices have somewhat dithered following the debuts of the spot funds, professional investors see more substantial gains arriving over the next several months.
“Around 73% of professional investors expect Bitcoin to rise by 10% or more as a result of the SEC’s decision with nearly 1 in 10 predicting gains of 51% or more over the next six months, the study with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $816 billion in assets found. The study was conducted when the price of Bitcoin was around $45,000,” according to a new survey by Nickel Digital Asset Management.
Other Pertinent Details
The Nickle Digital polled reveals other tidbits that are perhaps noteworthy to BLOK investors. For example, 95% of those queried view the approval of spot bitcoin ETFs in the U.S. as a game-changing event. Meanwhile 80% see launch of those ETFs leading to approvals for other spot crypto exchange traded products. The latter point could be a longer-ranging upside catalyst for BLOK.
“The SEC approval of Bitcoin spot ETFs was much anticipated and factored into pricing, with the fall in price over the last week very much expected,” noted Nickel Digital CEO Anatoly Crachilov. “However, it is a game changer for the industry over the long run and a potential inflexion point for the industry with institutions upbeat about the price reaction over the next six months with an expectation that more digital assets will become available to invest in via spot ETFs.”
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