Valkyrie Investments, a key player in the crypto space, expects the Securities and Exchanges Commission (SEC) to greenlight spot Bitcoin ETFs on Wednesday, with trading set to kick off on Thursday.
Paragraph: Breaking News - SEC Decision Imminent
The cryptocurrency community eagerly awaits the SEC's decision on the debut of the first Bitcoin spot exchange-traded fund (ETF). Valkyrie Investments, a prominent issuer, is optimistic about a favorable outcome, anticipating approval shortly.
Paragraph: Valkyrie's Co-founder Steven McClurg's Statement
In an interview with The Block, Steven McClurg, co-founder and CIO of Valkyrie Investments, shared insights. "We're expecting the SEC will deem the ETFs effective at close of business on Wednesday and the trading to begin on Thursday morning," said McClurg.
Paragraph: Market Impact Predictions
If the anticipated approval comes through, McClurg foresees a substantial influx of $200 million to $400 million in investor funds into Valkyrie's ETF. Furthermore, the broader market might witness an impressive $4-5 billion inflow during the initial weeks of trading.
Paragraph: ETF Launch Challenges
Launching a Bitcoin spot ETF involves intricate processes, with McClurg highlighting the dual custody challenge. Managing assets on both crypto and cash platforms requires meticulous coordination, resembling double the effort for a traditional ETF launch.
Paragraph: Retail Investors Take the Lead
Contrary to expectations of institutional dominance, McClurg suggests that retail investors may take the lead initially. Financial advisors and potential outflows from Grayscale's fund (GBTC), undergoing conversion to an ETF, are also expected participants.
Paragraph: Coinbase Lawsuit Unperturbing
Addressing concerns about Coinbase's ongoing SEC lawsuit, McClurg downplays it, likening it to typical challenges faced by major financial institutions such as Goldman Sachs and Morgan Stanley. He asserts that Coinbase's custody business remains unaffected.
Paragraph: Fee Wars Among Issuers
A noteworthy aspect of the Bitcoin spot ETF race is the intense fee competition among issuers. Fees range from 0.24% to 1.5%, with Valkyrie offering a competitive 0.8%. McClurg acknowledges that profitability might be delayed but remains confident about the ETF's long-term success.
Paragraph: Profitability Outlook and Long-Term Commitment
Responding to queries about low fees impacting profitability, McClurg acknowledges the initial challenges but emphasizes the long-term commitment. Valkyrie, having dedicated three years to ETF development, anticipates turning a profit within the first year of trading.
Paragraph: Bitcoin's Enduring Allure
McClurg concludes with optimism, stating, "Bitcoin is a very exciting place where people are going to be gathered for a long time," highlighting the enduring appeal of the cryptocurrency.
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