Eric Balchunas, Senior ETF Analyst at Bloomberg, has indicated that Bitcoin ETFs are on the brink of significant growth due to two major developments expected before the year ends. These developments are expected to enhance their accessibility and appeal to a wider range of investors across various platforms.
According to Balchunas, the initial push is expected as Bitcoin ETFs become accessible to the advisory sector, which has yet to feature these products on major wirehouse platforms. These platforms usually manage assets ranging between $7 trillion and $10 trillion. Balchunas predicts the ETFs will be listed on these platforms within the forthcoming months. He noted that this development is like a product gaining “shelf” space in major retail outlets, which invariably augments its exposure and utility.
Besides wirehouses, Balchunas also anticipates the potential incorporation of Bitcoin ETF products on premier platforms such as LPL Financial, the foremost investment broker in the United States, and the distinguished financial services firm Raymond James. This expansion is expected to be complemented by subsequent adoption by smaller entities, thereby dilating the accessibility of these financial products.
The second significant development involves the introduction of options trading for Bitcoin ETFs, expected by September. According to Balchunas, this addition could catalyze a notable price surge, especially with the upcoming Bitcoin ‘halvening.’ This marks a crucial phase for Bitcoin ETFs, which have performed commendably to date without the support of major platforms or instruments like options trading.
The fact that they’ve done this well, without solicitation, without the big platforms, without options is a minor miracle,” Balchunas said.
Balchunas expanded on the future prospects for Bitcoin ETFs, underscoring the potential for banks to develop structured products akin to those surrounding Ark Invest ETFs. Beyond traditional options, he foresees the introduction of 2X spot bitcoin ETFs, which will integrate swaps directly within the ETF structure. This innovation, he believes, will see one or two of these leveraged ETFs gaining significant traction in the market.
Further elaborating, Balchunas anticipates the adoption of covered call strategies and the creation of nuanced financial products, such as those aligning long Bitcoin positions with short gold positions. Balchunas added that these institutions are going to “experiment” and find a few “hits,” which will all “feed on the ecosystem.”
On a related note, Balchunas has also shown confidence in the sustainability of all ten Bitcoin ETFs. This sentiment was echoed in his recent social media post, where he highlighted that even the ETF with the least assets under management, $BTCW, holds a commendable $74 million.
