In a recent chat on CNBC Television, CoinShares’ Chief Strategy Officer, Meltem Demirors, shared her perspective on the potential approval of Bitcoin exchange-traded funds (ETFs) and why it wouldn’t trigger a bearish market for the leading cryptocurrency.
Demirors pointed to the continuous influx of investment into crypto exchange products (ETPs) as evidence of the persistent demand for Bitcoin. She emphasized that the approval of spot-based Bitcoin ETFs could result in billions of dollars pouring into the crypto asset.
Contrary to the notion of a “sell-the-news” event, Demirors highlighted the ongoing positive trends in investment flows. Last year alone witnessed significant capital inflows, with $243 million in the last week of 2023 and a total of $2.2 billion throughout the year. According to Demirors, this unceasing demand for Bitcoin is likely to persist with the launch of new products, fueled by substantial seed funding from issuers like one injecting $200 million and rumors of BlackRock entering with $2 billion.
Demirors emphasized the scarcity of Bitcoin as a crucial factor, contributing to the sustained demand. With limited supply, the approval of ETFs is viewed as a catalyst for increased demand rather than a market downturn.
Shifting the focus to the broader crypto landscape, Demirors expressed caution regarding ETFs based on riskier digital assets. She attributed the hesitancy to the lack of an extensive track record and liquidity in markets outside Bitcoin. While acknowledging the significant investor demand—highlighting over $50 billion in global assets under management (AUM) across crypto ETPs—she underscored the dominance of Bitcoin, constituting over 75% of the total.
Demirors recognized Ethereum as the second-largest player, with $10 billion in AUM, followed by other assets like Solana. Despite the promising figures, she suggested that the market needed time to become comfortable with ETFs tied to a broader range of crypto assets.
As of the latest update, Bitcoin is trading at $44,100.