The much-anticipated launch of bitcoin spot ETFs in the United States this year sparked a surge of optimism regarding the cryptocurrency’s value. The idea was simple: With an accessible and cost-effective avenue for regular investors to enter the bitcoin market, the demand for bitcoin would increase, potentially driving up its value.
However, the response has been somewhat mixed. Despite bitcoin’s value nearly doubling in the past year to approximately $43,000 today, it has mostly traded sideways in recent weeks. Could the hype and subsequent response be another case of the classic Wall Street adage, “Buy the rumor, sell the news”?
In our quest for insights, we turned to TechCrunch readers to gauge their sentiments on purchasing bitcoin via the new spot ETFs, their existing bitcoin holdings, and their expectations regarding the impact of these investment vehicles on bitcoin’s value and the broader crypto market.
After receiving responses from several dozen founders and operators, intriguing trends emerged. Around a quarter of respondents indicated that they do not plan to purchase bitcoin via an ETF as they already own bitcoin through various platforms such as self-custody, Coinbase, KuCoin, and more. Interestingly, Dara Khan, the head of marketing at Decent DAO’s bitcoin, humorously mentioned that her wallet ended up “at the bottom of the ocean, lost it in a boating accident :(“.
Approximately one-eighth of respondents expressed no intention to buy bitcoin via an ETF and did not own it elsewhere, reflecting a segment of crypto skeptics.
On the other hand, nearly half of the respondents expressed an intention to buy bitcoin via an ETF while already holding it elsewhere, making this the most prevalent response. The group that planned to buy bitcoin via an ETF without owning it elsewhere constituted the smallest segment of the respondents.
This data suggests that bitcoin spot ETFs may not be as appealing to individuals who do not already own bitcoin as initially anticipated. While these ETFs may boost overall demand for bitcoin, they might not necessarily attract those who were previously not invested in bitcoin.
While some foresee positive price effects from spot bitcoin ETFs, not everyone believes they will revolutionize the game. Gene Haba Jr., the founder of Pledge Circle, believes that decentralized markets may find greater success with stablecoins and other crypto-money systems that are simpler for the mainstream to understand and adopt.
Tom Munson, an analyst at Adit Ventures, anticipates a positive impact from spot bitcoin ETFs, likening it to a rising tide lifting all boats. However, he suggests that profits earned from bitcoin may be redirected into other cryptocurrencies like ether or stablecoins, leading to general price appreciation but not necessarily increased adoption.