“Wall Street Loads Silver Bullets, Has Bitcoin Entered a New Round of ‘Institutional Bull Market’?”

Yesterday, the cryptocurrency market witnessed a historic moment as the U.S. Securities and Exchange Commission (SEC) finally approved 11 Bitcoin spot ETFs. This approval also means that investment products previously considered high-risk by traditional finance are now included in traditional investment portfolios. Will this wave of institutional involvement in the crypto market bring about an “institutional bull”?
(Background:
Analysis of Trading Strategies after ETF Approval: Analysts: Profit-Taking, BTC Shows Signs of Topping Out
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(Background:
Female stock market guru bets 25% of her fortune on BTC: Bitcoin ETF to drive BTC to $1.5 million by 2030
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In the early morning of January 11th, the U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin spot ETFs, including BlackRock, Fidelity Funds, Invesco, Grayscale, and other traditional and emerging capital entities, allowing them to enter the cryptocurrency market through Bitcoin spot ETFs.
SEC Chairman Gary Gensler continued to warn of the risks associated with Bitcoin, stating, “While we have approved the listing and trading of certain Bitcoin ETP shares today, we have not approved or endorsed Bitcoin. Investors should be cautious about the countless risks associated with products related to Bitcoin and its value and cryptocurrencies.”
1. Several traditional asset management giants enter the arena
According to SEC filings, the 11 approved Bitcoin spot ETFs include institutions such as BlackRock, Fidelity, VanEck, Bitwise, Franklin Templeton, Valkyrie, Hashdex, ARK 21Shares, Grayscale, WisdomTree, and Invesco.
The approved financial institutions include both emerging funds focused on cryptocurrency assets, such as Grayscale, as well as traditional financial institutions such as BlackRock, Fidelity, and Invesco.
Grayscale, established in 2013, is a cryptocurrency asset management fund under the Digital Currency Group. As one of the famous Bitcoin whales, Grayscale has approximately $36 billion in assets under management and offers several single-asset trust funds, including BTC and ETH, as well as managed funds focused on large-cap cryptocurrencies.
ARK Invest, known for its bets on Tesla and Bitcoin, is an investment management company founded in 2014 by Cathie Wood, known as the “female version of Buffett.” ARK Invest focuses on disruptive innovation opportunities in areas such as artificial intelligence, robotics, energy storage, DNA sequencing, and blockchain technology. Currently, ARK Invest manages assets worth over $11 billion, with a significant portion of its stock holdings related to crypto, such as multiple increases in Coinbase stock (COIN) in the past year.
Compared to emerging investment institutions focused on the cryptocurrency field, the entry of traditional Wall Street institutions such as BlackRock, Invesco, and Fidelity has excited cryptocurrency investors, as it is believed to bring more traditional capital into the cryptocurrency field.
These institutions have had many connections with cryptocurrency assets before this.
BlackRock, established in 1988, is one of the world’s largest asset management giants. With approximately $9 trillion in assets under management, BlackRock covers stocks, fixed-income investments, cash management, alternative investments, and advisory strategies, among others.
BlackRock has entered the cryptocurrency field by providing cryptocurrency trading and custody services, investing in Bitcoin and other cryptocurrencies, and holding stocks of Bitcoin-related companies.
Fidelity, managing $4.5 trillion in assets, was founded in 1946 and is one of the top ten asset management giants in terms of global assets under management.
In 2018, Fidelity announced the launch of Fidelity Digital Asset Services, which provides custody and trading execution services for digital assets. In addition to institutional investors such as hedge funds, family offices, and market intermediaries, Fidelity also opened cryptocurrency trading positions to retail investors.
WisdomTree, established in 1985, is also an old asset management company in the United States. WisdomTree launched its first batch of ETFs in June 2006 and has become one of the major ETF providers in the United States. Currently, WisdomTree manages assets worth over $100 billion. WisdomTree has a deep layout in tokenized U.S. bonds and offers several tokenized U.S. bond fund products.
VanEck, known for its investments in foreign growth stocks and gold, was established in 1955 and is also aiming to get a share of the cryptocurrency investment market. VanEck manages over $760 billion in assets.
In November 2021, VanEck launched the Bitcoin futures ETF (XBTF), which currently has assets under management exceeding $59 million. VanEck’s Ethereum futures ETF (EFUT) is also scheduled to start trading in October 2023. In addition, VanEck has invested in well-known cryptocurrency companies such as Binance.US and Gemini.
Invesco, founded in 1978, is also one of the well-known comprehensive service asset giants in the United States. Invesco currently manages assets exceeding $1.5 trillion and manages over 200 ETFs, famous for its ETF Invesco QQQ, which tracks the Nasdaq 100 Index. Invesco launched an investment fund focusing on the metaverse in 2022 to make strategic investments in blockchain and metaverse hardware, and it is also one of the limited partners behind the crypto fund Dragonfly Ventures III.
Franklin Templeton, established in 1947, is an old asset management institution known for its bond funds under the Franklin brand, international funds under the Templeton brand, and value funds under the Mutual Series brand. Currently, it manages assets worth $1.4 trillion. Franklin’s government money market fund, FOBXX, is currently the largest player in the tokenized U.S. bond market. In addition, Franklin launched a metaverse ETF in 2022.
As Bitcoin and other cryptocurrencies have grown from obscurity to an investment category that global investors cannot ignore, the entry of these traditional asset management giants signifies a legitimate opportunity for them to enter the cryptocurrency industry, and they are determined to promote wider acceptance of Bitcoin among investors.
2. Is a new “institutional bull” on the horizon?
It is well known that cryptocurrencies have been associated with “high risk” and have been separated from traditional financial products, causing the financial industry to hesitate. As Bitcoin has developed from an obscure “virtual currency” to a cryptocurrency investment product with a value of up to $40,000, its wealth-generating potential has become evident to traditional finance. This has made the crypto market an enticing prospect for the traditional financial sector.
For the traditional financial industry, the approval of Bitcoin ETFs will provide them with a legitimate opportunity to enter the cryptocurrency industry. Traditional financial giants will be able to engage in Bitcoin ETF business openly, and institutions can invest directly through trading platforms and brokers without having to deal with cryptocurrency exchanges.
The simplification of capital entry will also attract more funds into the crypto market.
On January 11th, Eric Balchunas, a senior ETF analyst at Bloomberg, stated that BlackRock may inject $2 billion in assets on the first day of Bitcoin spot ETF trading, breaking the first-day flow record.
Bloomberg’s ETF analyst predicts that the inflow into Bitcoin ETFs is expected to reach $15 billion, while Standard Chartered Bank’s forecast is even more astonishing, stating that if Bitcoin ETFs are approved, it is expected that $100 billion will flow into the Bitcoin ETF market by the end of this year.
If these predictions come true, with a large influx of funds, the liquidity of the crypto market will greatly increase, trading volume and activity will increase, and market vitality will be stimulated, driving the development and innovation of the entire industry.
The approval of Bitcoin ETFs is a significant milestone for the cryptocurrency market, signifying the formal entry of cryptocurrencies into mainstream financial markets. This is not only a victory for Bitcoin but also a victory for grassroots movements becoming “mainstream.” It also means that the concept of “cryptocurrency” has gained social mainstream recognition to some extent and has begun to be regulated and protected by laws. This will drive the development of the entire industry towards maturity, standardization, and transparency.
The standardization and transparency of mechanisms related to cryptocurrencies will also contribute to the development of the cryptocurrency market, promoting the market’s maturity.
The previous Bitcoin bull market, driven by capital such as Grayscale, was known as the “institutional bull,” but the bubble driven by high leverage was eventually liquidated, followed by a prolonged bear market.
With the expectation of Bitcoin spot ETFs, Bitcoin has already risen by over 160% in 2023. With more traditional capital entering the market, will a new “institutional bull” be far behind?
Institutions have already made predictions for the price of Bitcoin at the end of 2024: Standard Chartered Bank predicts an impact of $100,000.