Immediate ETF Listings Possible, but Broader Impact Requires a Minimum of 90 Days for Evaluation: Ophelia Snyder

In a landmark move for the cryptocurrency market, the U.S. Securities and Exchange Commission (SEC) has given its approval for the first spot bitcoin exchange-traded funds (ETFs). While this development is anticipated to pave the way for ETF listings on exchanges within days, industry experts caution that the broader effects will unfold over months, raising questions about the regulatory landscape and potential market transformations.

Ophelia Snyder, co-founder of crypto custodian 21Shares, emphasizes that despite the swift approval of ETFs, the tangible impact on the market won’t be evident immediately. Wealth-management firms, bound by a meticulous approval process, are expected to take at least 90 days to incorporate these new financial instruments into their portfolios. In an interview, Snyder highlighted, “Just because a product’s available to trade on does not actually mean that every adviser in America can buy it… it requires a lot of compliance for them to add the tickers – they don’t get added by default.”

Ophelia Snyder

21Shares, based in Zug, Switzerland, collaborated with Cathie Wood’s ARK Invest to propose an ETF, which secured approval from the SEC. Analysts at Standard Chartered project significant inflows, estimating $1 billion within the first three months and a potential surge exceeding $100 billion by the year’s end. Snyder offers perspective, stating that approximately $1.2 trillion of net inflows poured into ETFs as a whole over the past 24 months, juxtaposed against the total market cap of all cryptocurrencies at around $1.8 trillion.

However, Snyder cautions against premature optimism. The approval of ETFs doesn’t eliminate the SEC’s reservations about the broader cryptocurrency industry. Regulatory uncertainties loom, and SEC Chair Gary Gensler’s expressed concerns, citing frauds and bankruptcies within the crypto space as the “Wild West,” remain a focal point.

Snyder notes, “What the SEC is going to do about bitcoin still matters, and that’s something that people just don’t totally get. Managers at financial firms are staking their reputations and their careers on the investments that they make. If they make a bitcoin investment and then the SEC decides it’s illegal, that’s going to be a problem.”

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