A pending Bitcoin ETF application is sure to be approved. But that isn’t the talk around water coolers (or via text and social media DM’s) at places like the CBOE, CME, NYSE, and global financial institutions. Each of those organizations is sure that an approval is coming and are preparing the infrastructure for onboarding of any and all new crypto money.
The talk has quickly turned to the next set of crypto ‘structured products’ that could flood the market in 2019. All manner of ETF’s connected to other cryptocurrencies and ‘baskets’ of alt-coins are coming. And it won’t stop with just ETF’s.
One conversation was illuminating with a source from Gemini: “We’ve got months worth of backlog that is waiting for the first approval. Some of the biggest institutions in the world have crypto products prepped and ready to hit the markets. We expect 2019 to be a year of accelerated adoption.”
A former CME executive echoed those sentiments: “Some of our clients are not only locked and loaded with ETF products, but there are a second set of firms that are set to service and market those products that will indirectly benefit from a succession of crypto-based approvals. This really is the push that seems to be moving the markets as it is on the tip of everybody’s tongues at the moment. That first approval will open the floodgates. In six months the first ‘Bitcoin ETF’ will look like a dinosaur to crypto investors. And the regulation that will be attached to any structured products like this will gather massive amounts of institutional assets.”
A Goldman Sachs source confirmed the 2019 narrative: “2018 has been about building out the legal/regulatory and custody architecture that creates a level of comfort for clients. 2019 will address adoption and investment directly.”
Read the pages of this site or any crypto-based publication over the past month and you can see *clear-eyed* the pent-up demand from all sorts of well-known names, individuals, and institutions, for the right crypto product. Those massive amount of dollars are there for the taking.
First movers in the space will take advantage and reap huge benefits. Names like BlackRock, Fidelity, Goldman Sachs – all of them have current ‘working groups’ connected to digital assets. You can bet that each of them is ready to pounce when the regulatory framework finally takes shape.
Institutions are serious and poised to shovel client cash into cryptos, finally. The moves by Bakkt, Fidelity, ErisX (and by extension DRW), TD Ameritrade, Yale and Harvard endowments over the past 45 days prove that the architecture is nearly finished and lift off is imminent.
There is zero, ZERO chance the above organizations make the moves and spend the capital to build what they are building without a seriously good faith understanding of what regulators will and will not do. That isn’t how ‘high finance’ works.
Not only is a Bitcoin ETF coming, but a flood of crypto-based products will quickly follow.