Financial Insights That Matter
By Suzanne McGee
(Reuters) – What a difference a year makes.
Rewind the clock to early January 2024, and the asset-management industry was anxiously watching to see if the much-anticipated debut of U.S. spot bitcoin exchange-traded funds could live up to expectations they would pull in as much as $30 billion in their first year.
Today, those issuers are cracking open the champagne.
That first wave of bitcoin ETFs attracted a whopping $65 billion in 2024, helping to propel the price of bitcoin from $43,000 to more than $100,000. The largest of those new products, BlackRock’s iShares Bitcoin Trust, has become the most successful debut in the ETF industry’s 35-year history.
But that’s just the start of the party, cryptocurrency denizens believe.
Shortly after those products celebrate their first anniversary on Jan. 10, President-elect Donald Trump – who has pledged to be a crypto president – will be sworn in for the second time, igniting what cryptocurrency fans believe will be a new golden era for the digital asset class.
Applications for new, and often novel, crypto products are already piling up in regulators’ inboxes.
“Everyone is now aware of how much money there is to be made, and with a new, more friendly administration, there’s no reason not to go ahead and file your best ideas with regulators,” said Joe McCann, founder and CEO of digital assets hedge fund Asymmetric in Miami.
While Gary Gensler, Biden’s crypto-skeptic Securities and Exchange Commission chair, was forced to approve the first spot bitcoin ETFs – and similar ethereum products – after losing a court challenge, he continued to warn that cryptos are highly volatile and beset by scams and manipulation.
Paul Atkins, Trump’s appointee to succeed Gensler, is widely seen as a supporter of digital assets.
As of late November, companies including VanEck, 21Shares and Canary Capital had seized upon those expectations of an increasingly crypto-friendly tone in Washington by filing at least 16 applications to launch exchange-traded products tracking crypto indices or tokens such as Solana and Ripple’s XRP, according to SEC filings and industry sources.
LIGHTER REGULATION EXPECTED
The push to launch the next wave of crypto products began in earnest weeks before the election, with many in the industry anticipating a lighter regulatory touch regardless of whether Trump or his rival, Vice President Kamala Harris, won.
“Since it takes several months to get regulatory approvals and bring an ETF to market, many issuers began making a calculated bet that this year, the climate would be different, and wanted to have their products in the queue ready to go,” said Matthew Sigel, head of digital assets research at VanEck, which hopes to launch a Solana ETF in 2025.
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