<\/p>\n
Recent \u201cbreakthroughs\u201d are reason enough for Bitwise CIO Matt Hougan to suggest that this time really is different.<\/p>\n
The US Securities and Exchange Commission has repeatedly declined applications for a spot bitcoin ETF since the initial attempt in 2013. Back then, bitcoin was valued at just $80. However, Hougan argues that the market has matured a great deal since that time. With the latest series of applications, conditions appear to be changing for the better.<\/p>\n
On the 0xResearch podcast (Spotify<\/a>\/Apple<\/a>), Hougan says \u201cwe\u2019re getting close to an approval,\u201d pointing to Grayscale\u2019s recent lawsuit victory over the SEC and BlackRock\u2019s ETF application success rate, \u201cwhich has a nearly perfect record of launching ETFs.\u201d<\/p>\n Hougan adds that Bitwise \u201cjust sent in an additional 40 pages of research<\/a>\u201d to the SEC. The research answers \u201cevery objection the SEC has raised over the history of denying a spot bitcoin ETF.\u201d<\/p>\n \u201cThey\u2019ve rejected, I think, 33 spot bitcoin ETFs,\u201d Hougan says. \u201cFor each one, they wrote between 20 and 100 pages of reasons they were rejecting it.\u201d<\/p>\n Read more:<\/strong> What Grayscale\u2019s win against the SEC actually means<\/a><\/p>\n \u201cWe just line item all those rejections and then provide data driven responses to explain why the market is now ready to support an ETF,\u201d he says, adding, \u201cI\u2019m optimistic that we\u2019ll see a spot bitcoin ETF launch this year.\u201d<\/p>\n Spot bitcoin ETFs<\/a> have been rejected so many times, Hougan says, that long-time onlookers are numbed to the possibility. Many are experiencing a sort of \u201cboy who cried wolf\u201d syndrome, he says, believing such an ETF will never be approved.<\/p>\n \u201cBut if you talk to the firms, not just Bitwise,\u201d Hougan says, \u201cbut other firms that are operating in this space, it does feel different this time than it did a few months ago.\u201d<\/p>\n Some issuers have received responses<\/a> from the SEC on their ETF prospectus, Hougan adds, which has never happened before. \u201cThere\u2019s reason to believe the market hasn\u2019t priced in or thought about the real probability that we may get one in the coming months.\u201d<\/p>\n While crypto futures ETFs have not been received with great enthusiasm<\/a>, Hougan expects an entirely different story with spot ETFs. \u201cA spot ETF is going to be orders of magnitude bigger than a futures ETF.\u201d<\/p>\n \u201cIf you look in the gold market, which is the closest corollary,\u201d Hougan says, \u201cspot gold ETFs have about 100 billion dollars in assets under management. Gold futures ETFs actually have zero because the only one that existed closed down because of lack of interest.\u201d<\/p>\n \u201cWhat people want is spot Bitcoin. What people want is spot Ethereum. They\u2019ll use futures based ETFs until they have those.\u201d<\/p>\n Hougan expects \u201c100x\u201d demand for spot crypto ETFs compared to futures. \u201cThey\u2019ll have a much bigger impact on the market.\u201d<\/p>\n Hougan explains that many financial professionals are deciding what to buy in the traditional market, \u201cand it just looks gross.\u201d<\/p>\n \u201cThey\u2019re going to go into bonds and bonds look gross. They\u2019re going to go into stocks and stocks look gross. It\u2019s going to be a recession. They\u2019re already highly valued.\u201d<\/p>\n The phenomenon is causing investors to consider how to escape the \u201cgray overhang\u201d<\/a> of rising rates, spiraling inflation and a possible recession, he says. \u201cWhat are the secular trends that are strong enough to supplant that and surpass that?\u201d<\/p>\n \u201cRight now, crypto looks really good.\u201d<\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\nFutures versus spot ETFs<\/h2>\n
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