- According to Rick Edelman, the “dark chapter” of FTX could see its end soon.
- He also discussed significant topics and speculations surrounding ETFs.
In an interview on the “Unchained” podcast, host Laura Shin discussed various topics surrounding Exchange-Traded Funds [ETFs] with Rick Edelman, Founder of the Digital Assets Council of Financial Professionals.
Crypto overshadowing “dark chapter of FTX”
The recent downfall of Sam Bankman-Fried, former CEO of FTX [FTT], has left a lasting impact on the crypto industry, akin to the Bernie Madoff scandal in traditional finance.
While some financial advisers may still associate the FTX collapse with the face of crypto, the ongoing positive developments in the industry are gradually overshadowing this dark chapter.
As Bitcoin [BTC] and Ethereum [ETH] prices surged, ETFs performed well, and major companies like Disney embraced NFTs, the narrative shifted.
Bitcoin futures ETFs failed to impress financial advisers
Edelman highlighted that the Bitcoin Futures ETFs, which have been available for a couple of years, failed to garner significant interest from financial advisers.
Despite the initial hype surrounding their launch, advisers found little excitement in these funds, primarily due to the complexities and expenses associated with trading futures.
Regardless, the lackluster response to Bitcoin Futures ETFs has set the stage for the much-anticipated launch of spot Bitcoin ETFs.
Edelman emphasized that there is a widespread expectation in the financial industry that spot Bitcoin ETFs will elicit a far greater level of interest compared to their futures counterparts.
The fundamental difference between spot and futures ETFs lies in their accessibility and simplicity, making spot ETFs more attractive to advisers.
Spot Bitcoin ETF launch: Logistics
As the eagerly awaited launch date for spot Bitcoin ETFs looms, financial watchdogs are gearing up for a potentially transformative moment in the cryptocurrency market.
The 10th of January has been identified as a pivotal day, with Bloomberg analysts predicting the initiation of these groundbreaking investment vehicles.
Reflecting on the historical context, the launch of Bitcoin Futures ETFs stirred excitement. However, the impending spot Bitcoin ETFs, with a dozen issuers in contention, present a unique landscape.
Edelman anticipated an initial surge as early adopters will seize the opportunity. Yet, he emphasized that sustaining this rapid influx might prove challenging.
While the early adopters are poised to jump in fervently, the subsequent trajectory is expected to unfold over months and years rather than mere days. Edelman attributed this elongated timeline to the intricate logistical processes inherent in incorporating a new investment opportunity.
He also predicted that the winners in this race would be the investors. Notably, the founder drew parallels with the SEC’s approach to gold ETFs, emphasizing the need for multiple approvals simultaneously to encourage healthy market competition.
Ethereum ETFs are anticipated to launch soon after
The conversation then shifted to Ethereum ETFs, anticipated to launch soon after Bitcoin. Edelman noted that while the crypto community buzzed with excitement, mainstream attention remained limited.
However, he foresaw a future scenario where advisers, having dipped their toes into Bitcoin, would seek broader crypto exposure, with Ethereum emerging as a natural choice.
In Edelman’s view, advisers and clients would realize the limitations of a Bitcoin-only approach, leading to a broader exploration of the crypto landscape.
Ethereum, as the second-largest digital asset, presented itself as a compelling choice, driven by its technological capabilities and potential for commercial applications.