Note: The original text comes from Decrypt, written by Murtuza Merchant and published on June 16, 2024!
This week, Decrypt spoke with William Quigley, co-founder of Tether and WAX, who said that after the approval of the US spot Bitcoin ETF and Ethereum ETF, Wall Street's "greed" will drive more and more such products, so don't expect the momentum of cryptocurrency ETFs to slow down.
(*ETF stands for Exchange-Traded Fund, which is an investment tool that can be bought and sold on an exchange like stocks. Cryptocurrency ETF is a fund whose asset allocation is mainly based on cryptocurrencies.)
Quigley predicts that other major cryptocurrency ETFs such as Solana and Cardano will proliferate due to Wall Street's relentless pursuit of profits. He said: "Wall Street is greedy. Whenever Wall Street packages a new product and sells it to consumers, and the product is a huge success, there will definitely be a large number of imitators. If the Bitcoin ETF fails, there will be no other cryptocurrency ETFs at all."
Quigley said Wall Street loves the "next hot new thing" because it's what they can talk about with consumers and sell products to. But if the momentum eventually slows, Quigley expects ETF providers to shift their focus to the next big trend. He added: "Next, we're going to see new ETFs launched until there's a big pullback. Then you're going to see those ETFs shut down by issuers due to lack of demand."
In January this year, the long-awaited spot Bitcoin ETF was approved by the U.S. Securities and Exchange Commission (SEC), marking an important step in integrating cryptocurrencies into the mainstream financial market. Spot Bitcoin ETF is a more convenient and regulated investment tool. Its emergence allows investors to obtain Bitcoin investment opportunities through traditional stock exchanges, allowing investors to gain exposure to Bitcoin without directly holding Bitcoin, thereby lowering the investment threshold and obtaining more liquidity.
The approval of the spot Bitcoin ETF has aroused great interest and huge investment inflows, highlighting the growing interest and acceptance of digital assets by individual and institutional investors. At the same time, the success of the Bitcoin ETF has paved the way for many other cryptocurrency-related financial products to follow, and the entire cryptocurrency market has been looking forward to the great success of other such products.
Anticipation for the Ethereum ETF is particularly high, especially after positive signals from regulators. The Ethereum ETF received preliminary approval at the end of May, but will not start trading until its S-1 registration form is approved. Gary Gensler, chairman of the U.S. Securities and Exchange Commission, said on Thursday that the approval process for the Ethereum ETF may be completed by the end of the summer. "Individual issuers are still working on some registration procedures, and everything is going well. I expect the Ethereum ETF to be launched sometime this summer." Gensler said at a Senate hearing last Thursday.
Despite the mainstream attention paid to ETFs, Quigley expressed dissatisfaction with the increasing involvement of the traditional financial community in the cryptocurrency space. "I'm fine with Wall Street not being involved in crypto before," he said. "Will crypto become smaller after Wall Street is involved? The answer is yes. But I don't think it's necessary to expand it further now." He warned that Wall Street's aggressive marketing of crypto products could pose significant risks, especially if institutional investors withdraw during a market downturn.
Although Quigley is skeptical about Wall Street involvement, he acknowledges that large capital inflows are essential for the market to grow substantially. “If you want large amounts of capital, then yes, you have to do something like ETFs,” he conceded.
Although the ETF hype to some extent pushed Bitcoin to an all-time high of $73,700 in March and made people look forward to the quadrennial Bitcoin halving event in April, Bitcoin has never been able to break through this price in the following months, and its price is still falling this week, and its current price is just below $67,000.
(*Source: coinmarketcap)
However, typically, six months or more after a halving event, the price of Bitcoin rises as the effects of the halving begin to take effect and the expansion of supply is limited. Quigley believes that historical patterns will continue along this path. He said: "Now, the price of Bitcoin cannot rise higher because the timing is not right." However, he predicts that its price will rise significantly in the future.
*Friendly reminder: This article is for popular science purposes only and does not constitute any investment advice!