CBOE Digital’s president, John Palmer, predicts that the approval of the first-ever spot exchange-traded fund (ETF) for Bitcoin by US regulators will attract a wave of new institutional investors. Palmer believes that pension funds and registered investment adviser-based vehicles will be drawn to Bitcoin assets, gaining access that might be currently limited to native spot Bitcoin tokens.
In an interview on Bloomberg TV, Palmer expressed confidence that the approval of a spot Bitcoin ETF will create opportunities for institutional players that may not have access to Bitcoin assets through traditional means. The potential influx of new investors could reshape the landscape for Bitcoin investments, marking a significant development for the cryptocurrency market.
On Tuesday, Bitcoin surpassed the $45,000 mark for the first time in nearly two years, coinciding with an upcoming Jan. 10 deadline for the US Securities and Exchange Commission (SEC) to decide on the approval of a spot ETF for Bitcoin. Notable applicants, including BlackRock Inc. and Fidelity, have submitted amended filings in anticipation of the SEC’s decision.
Palmer envisions a broader impact on Bitcoin derivative products in the market following the potential approval of a spot ETF. He anticipates institutional players relying more on derivatives to hedge risks, expanding the scope and usage of Bitcoin-related financial instruments.
CBOE Digital, a result of CBOE’s acquisition of ErisX in 2022, already offers spot and futures crypto trading for select tokens. The platform plans to launch margined Bitcoin and Ether futures on Jan. 11, providing clients with the ability to trade futures without the need to post the full collateral upfront.
As the cryptocurrency market continues to evolve, the potential approval of Bitcoin spot ETFs holds promise for increased institutional participation and a broader array of investment opportunities in the crypto space.
