Crypto leaders foresee maturation after spot bitcoin ETF approval amid volatility concerns

Prominent figures in the crypto industry have expressed optimism about increased crypto adoption and a more mature crypto market following the U.S. approval of spot bitcoin ETFs, while analysts warned about potential risks related to bitcoin price volatility.

Anthony Scaramucci, former White House communications director and now founding and managing partner at SkyBridge Capital, said in a statement shared with The Block that the approval of spot bitcoin ETFs signifies the recognition of bitcoin as a “legitimate asset.”

“We believe this approval will pave the way for greater mainstream education and acceptance around the merits and utility of blockchain-based assets and infrastructure,” Scaramucci added.

The Securities and Exchange Commission today announced the approval of spot bitcoin ETFs, with 11 such ETFs set to start trading as soon as Thursday. The 11 tradable spot bitcoin ETFs approved on Wednesday are funds from Bitwise, Grayscale, Hashdex, BlackRock, Valkyrie, BZX, Invesco, VanEck, WisdomTree, Fidelity and Franklin Templeton.

“Today will be remembered in crypto history,” said Richard Teng, the new chief executive officer of Binance, the world’s largest crypto exchange. “Spot bitcoin ETFs have arrived, giving BTC access to a whole new class of investors and making Bitcoin a more approachable asset for many crypto-curious,” he wrote in a post on X.

Asset managers remain optimistic

With the approval, Grayscale turned its flagship Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF, following a long journey and an August court win that ruled that the SEC had to re-review Grayscale’s bid for a spot bitcoin ETF.

Barry Silbert, founder and CEO of Digital Currency Group, the parent of Grayscale, said that GBTC, since its launch in 2013 in the U.S., has garnered nearly one million investors and amassed over $28 billion in assets under management, accompanied by daily trading volumes reaching into the hundreds of millions of dollars.

“Grayscale deserves a huge amount of credit for today, pushing this through the courts,” Brian Armstrong, co-founder and CEO of Coinbase, which serves as custodian to eight spot bitcoin ETFs, said in an X post today.

Cynthia Lo Bessette, head of digital asset management of Fidelity, noted in a statement sent to The Block that the affirmation of this approval signals positive momentum for the industry. “We’ve long believed a spot-priced exchange traded-product would be an efficient way for investors to gain exposure to bitcoin.”

VanEck CEO Jan van Eck said in a blog post that with many spot bitcoin ETFs coming to the market, one way for investors to decide which ETF to invest in is to “consider the commitment of the ETF sponsors.”

“We also know that investing in bitcoin is difficult due to its newness and volatility, among other risks,” he wrote. “This is why we scream for investors to dollar cost average — start right away (small) but dollar cost average over time and Hold On for Dear Life (or HODL).”

Meanwhile, the boss of stablecoin issuer Tether said the ETFs are expected to lead to a surge in widespread adoption. “Such increased interest and legitimacy are likely to spark a wave of innovation, attracting more talent and capital into the industry,” Paolo Ardoino, CEO of Tether and CTO of Bitfinex, said in a statement.

Potential risks

While the crypto industry celebrates the approval, SEC Chair Gary Gensler said Wednesday that the agency was not endorsing bitcoin as it approved spot bitcoin ETFs.

Gensler noted that the SEC’s decision “should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.”

“Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws,” he continued.

Rajeev Bamra, SVP of digital finance at rating agency Moody’s Investors Service, expressed that the ETF approval could lead to a more stable and liquid crypto market. However, the sustainability of this positive trend “depends on the trajectory of global monetary policy-making” and the availability of crypto to institutional investors through compliant products.

“The notorious price volatility of Bitcoin, as well as its fluctuating values against stablecoins and other cryptocurrencies, could expose mainstream investors to a less familiar spectrum of investment risks,” said Yiannis Giokas, senior director of Moody’s Analytics.

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