Financial services firm Cantor Fitzgerald analysts are optimistic about the approval of a spot Bitcoin (BTC) exchange-traded fund (ETF), which has long been awaited in the cryptocurrency market. Cantor Fitzgerald, known for its prime brokerage and investment banking services, believes that recent applications from asset managers seeking to launch a spot ETF for Bitcoin have a good chance of being approved by the US Securities and Exchange Commission (SEC). Previously, the SEC has been hesitant to approve a spot bitcoin ETF due to concerns about potential manipulation on offshore spot platforms. However, Cantor Fitzgerald is confident that the market surveillance procedures proposed by new applicants can address these worries and convince the SEC to grant approval.
Establishing Comprehensive Surveillance-Sharing Agreements
Analysts Josh Siegler and Will Carlson from Cantor Fitzgerald highlight the importance of establishing a “comprehensive surveillance-sharing agreement with a regulated market of significant size” to ensure regulatory compliance. This agreement would help address concerns about market manipulation and provide reassurance to the SEC. Once approved, a spot ETF for Bitcoin would have significant short-term implications for its price and the overall adoption and legitimization of Bitcoin as a valuable asset.
“The approval of a spot ETF would undoubtedly be a game-changer for Bitcoin. It would mark a pivotal moment for the long-term adoption and legitimization of the cryptocurrency market.”
Market Impact and Price Surge
The anticipation of a spot ETF approval has already led to a surge in Bitcoin’s price in recent weeks. The cryptocurrency rallied towards $35,000 earlier this month, driven by market speculation surrounding the potential approval of a spot ETF. Matrixport, a prominent crypto financial services platform, predicts a major Bitcoin rally if a spot ETF enters the market. With precious metals ETFs having a market cap of around $120 billion, Matrixport estimates that if 10-20% of precious metal ETF investors consider diversifying into a Bitcoin ETF as a hedge against monetary debasement and inflation, we could witness an inflow of $12 to $24 billion into the Bitcoin ETF, resulting in a price surge to $42,000.
“The approval of a spot ETF has the potential to attract billions of dollars into Bitcoin, representing a conservative estimate. This could bring significant growth and stability to the cryptocurrency market.”
Furthermore, as Bitcoin’s market dominance reaches 54%, its highest level in over two and a half years, it reaffirms the ongoing bull market for the leading cryptocurrency. Bitcoin’s dominance has steadily increased from around 38% since the beginning of the year, reflecting its strong performance and the confidence investors have in its long-term potential.
