Survey of financial advisers and Grayscale comments suggest strong support for spot crypto ETF

Survey of financial advisers and Grayscale comments suggest strong support for spot crypto ETF

Although the United States Securities and Exchange Commission has yet to approve a spot Bitcoin-exchange-traded fund for its investors, a recent Nasdaq survey indicated that this offering could encourage financial advisors to adopt crypto.

A Nasdaq survey on Monday found that 72% of 500 financial advisors would be more inclined to invest clients’ assets into cryptocurrency if the SEC approved a spot crypto ETF in the United States. 86% of financial advisors who have already invested in crypto products said that they plan to increase their allocations in the next year. This is roughly half of those who already have investments in ETFs linked with Bitcoin (BTC futures).

According to Jake Rapaport (Nadaq’s head for digital asset index research), “The overwhelming majority of advisors that we surveyed plan to start allocating to cryptocurrency or increase their current allocation to crypto.” Advisors will continue to look for institutional solutions to the crypto question, which is dominating client conversations as demand continues to rise.

A new Nasdaq survey finds that 72% of financial advisors who control $26T of assets would be more inclined to invest in crypto if there was a spot ETF. Advisors are also interested in investing in crypto. 86% plan on increasing their investment and prefer a port allocation of 6%. pic.twitter.com/3r2mxbGny9
— Eric Balchunas (@EricBalchunas) April 11, 2022

The SEC has yet to indicate that it will soon approve a spot BTC ETF. The SEC has rejected several rule changes to exchanges proposed by the New York Digital Investment Group (Global X), ARK 21Shares, and others. These would have allowed firms to trade shares in a Bitcoin exchange-traded funds. The SEC rejected each exchange, stating that they had failed to meet the Exchange Act and Rules of Practice requirements of showing that the ETF would “prevent fraudulent and manipulative acts or practices” and protect investors and the public interest.

Grayscale, one the next asset managers to be subject to a decision by the regulator on its spot Bitcoin ETF has launched a campaign in February to encourage U.S investors to make comments to the SEC. Grayscale’s Bitcoin Trust will be converted into a spot BTC ETF by the regulator. The public has already submitted hundreds of comments since April 4.

Lance Lewis, a Maryland resident, stated that investors should have the option of Grayscale conversion or a spot BTC ETF.

James Seyffart and Eric Balchunas, Bloomberg analysts, suggested that the SEC could approve an ETF for spot Bitcoin in the middle of 2023. This was based on a proposal to amend the definitions of “exchange” in the regulatory body’s rules. According to a survey by Nasdaq, only 38% of financial advisors believed it likely that the SEC would approve a spot cryptocurrency ETF in 2022. 31% thought it unlikely.

Related: Why the SEC continues to reject spot Bitcoin ETF applications

The SEC gave the green light to all investment vehicles that are linked to Bitcoin futures. This includes offerings from VanEck, ProShares and Valkyrie, despite the uncertainty surrounding a spot Bitcoin ETF. Grayscale CEO Michael Sonnenshein suggested that the Securities Act of 1933 approved Teucrium’s BTC futures ETF. This is in contrast to the 1940 one. This supports the notion that not all Bitcoin futures ETFs can be considered equal.

If the SEC is happy with a #Bitcoin Futures #ETF they should also be comfortable with an ETF that tracks spot Bitcoins. They can’t justifiably cite ’40 Act as the differenceiating factor.
— Sonnenshein (@Sonnenshein) April 7, 2022

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