While there has been a lot of excitement about how much assets under management (AUM) Bitcoin (BTC) exchange-traded funds (ETFs) are attracting, it is now clear that these ETFs are increasing demand for the underlying cryptocurrency itself, broker Canaccord Genuity said on Monday in a research report.
The broker hosted its Digital Assets Symposium 2024 last Thursday, hosting executives from 29 crypto-related companies.
“It is now becoming clear that the ETFs also have a significant multiplier effect, driving additional demand for the underlying BTC spot itself,” analysts led by Joseph Vafi wrote.
The broker noted comments from Swan Bitcoin, a pure-play Bitcoin investment advisor, who said it is “seeing a multiple increase in demand for an underlying spot as the ETFs push the BTC demand curve to the right while the BTC Supply curve this can.” I will not answer in the same way.”
Canaccord said that many investors, both retail and institutional, “find the underlying BTC spot more attractive than ETFs as there are potentially more opportunities to hedge and generate returns for HODLs over time as the asset class matures.” achieve.”
In the coming months, spot Bitcoin ETFs will be added to several registered investment advisor (RIA) platforms and major broker-dealer wirehouses, and with this additional distribution, “investment advisors who could more or less ignore Bitcoin will now at least forced to do so.” “Do you have an opinion” on cryptocurrency, the report says.
Some institutions, particularly sovereign wealth funds, are likely already invested in Bitcoin, and Canaccord expects announcements from these types of investors in the next few months.
New FASB accounting standards, combined with ongoing inflation concerns, “could lead more companies to follow MicroStrategy (MSTR) and view BTC, at least modestly, as an asset to keep on the corporate balance sheet,” the report continued.
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