Cryptocurrency ETF proponents are kicking speculation into overdrive as we head into 2024. Numerous companies remain locked in talks with SEC officials, aiming to secure highly coveted approvals for Bitcoin and cryptocurrency funds as early as Q1 next year.
Just this past week, representatives from at least seven different ETF issuers met directly with regulators to present their latest proposals. According to meeting attendees, SEC officials set a firm December 29th deadline for final product adjustments and updates. The implication being any firms that miss that tight cutoff would be out of contention for the first wave of the long-awaited spot Bitcoin ETF greenlights in early January.
Two full years after rejecting the first ever Bitcoin ETF applicant in 2021, the SEC suddenly seems to be racing towards the approval finish line. Their messaging suggests they want to have multiple non-overlapping products ready and lined up to hit the markets early next year. And with heavyweight institutions like BlackRock among those petitioning for an expedited go-ahead, the pressure is certainly mounting.
If even just one or two of these ETFs get cleared in Q1 2024 as momentum suggests, the floodgates could open for billions in fresh institutional investment to finally reach Bitcoin and filter down into other blue-chip cryptocurrencies.
But exactly which specific crypto assets stand to gain the most if Bitcoin ETF is approved in 2024?
Which Cryptos Will Boom If Bitcoin ETF Approved in 2024?
Here is our top three cryptos experts predict are primed for gains from ETF exposure in 2024.
Bitcoin – Could Crypto ETFs Ignite the Next Massive Bitcoin Bull Run?
As the first and most prominent cryptocurrency, it’s no surprise Bitcoin stands to benefit tremendously from any crypto ETF approvals. Ever since its pseudonymous creator Satoshi Nakamoto released the original Bitcoin whitepaper over a decade ago, it has become synonymous with the concept of digital currencies altogether.
Despite ups and downs over the years, Bitcoin has remained the gateway to crypto investing for most people. From retail traders to large scale institutional investors, getting exposure to Bitcoin is often the first move when entering the crypto space. And an SEC-approved Bitcoin ETF could rapidly accelerate this trend of mainstream adoption.
By providing a familiar, regulated investment vehicle linked directly to Bitcoin’s price, ETFs eliminate many of the existing headaches of owning cryptocurrencies directly. Concerns around custody, storage, taxation, and compliance are handled completely on the backend. Not to mention, investing in a Bitcoin ETF allows participation from retirement accounts and other investment funds that may have restrictions on niche assets like cryptocurrencies initially.
So if the floodgates truly open, and a Bitcoin fund gets the regulatory green light, expect a surge of fresh institutional capital flocking to Bitcoin—pension funds, mutual funds, asset managers, and more. JPMorgan alone could invest $500 million into a potential Bitcoin ETF. And with increased scarcity and demand sending Bitcoin prices upwards, mainstream FOMO is likely to kick in as well. The implications for the long-term growth and maturity of Bitcoin’s market could be unprecedented.
Ethereum – Are Ethereum ETFs Key To Unleashing A DeFi Revolution?
Let’s now shift our focus to Ethereum and why an ETF could be monumental for the second-largest cryptocurrency.
Ethereum has become much more than just a digital currency—it’s an entire environment that supports an ever-expanding array of decentralized apps and use cases. From popular NFT marketplaces like OpenSea to lending protocols like Aave, so much of the innovation in the crypto industry is happening on top of Ethereum. And the adoption of these Ethereum-powered dApps is accelerating among digital asset enthusiasts.
But make no mistake, awareness and participation in this Web3 activity is still very niche. Ethereum has yet to make that leap to the mainstream in any meaningful way—something an approved ETF could change almost overnight. By providing easy and safe exposure for large institutional investors, an ETF unlocks billions in potential capital inflows. And that tidal wave of fresh interest and investment around Ethereum could rapidly increase the adoption of Ethereum-based dApps among the general public.
When you combine this boost to usability with Eth’s already thriving developer ecosystem, you could envision a scenario where Ethereum cements itself as the go-to blockchain/crypto platform outside of digital currencies. NFT trading, crypto-backed lending, decentralized storage and computing—these could shift from speculative niches to everyday applications powered by Ethereum. And the long-term growth prospects for Eth and projects in its orbit could be truly astronomical as a result.
Of course, this is my optimistic take, and Ethereum isn’t without its shortcomings either in terms scalability and user costs. But its network effects and first-mover advantage are clear. Ultimately, an Ethereum ETF might take Ether from the crypto sidelines into an every-day reality—making it one of the biggest potential beneficiaries if approved in next year.
Solona – Will Solana Become A Household Name If SEC Approves ETF?
Shifting gears, another crypto asset that seems poised to ride an ETF wave is Solana. For those unfamiliar, Solana is an extremely fast and scalable blockchain network that has taken the crypto industry by storm over the last year. Thanks to its speed and low costs, it has already become a hotbed for everything from DeFi protocols to NFT marketplaces.
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But here’s the thing – most of the action around Solana is still very insular within the existing crypto community. Due to its relative newcomer status and tech complexity, mainstream awareness and adoption of Solana dapps remains limited. A Solana-linked ETF could be a perfect gateway to bridge this gap.
By providing easy retail and institutional investment exposure, a Solana ETF stands to greatly expand its investor base. Instead of needing to understand concepts like proof-of-history or overwhelmed by technical details, investors can simply add Solana to their portfolio just as they would a stock. And with Solana’s thriving developer activity and real-world use cases, that simplicity could go a long way.
Additionally, an ETF opens the door to things like retirement accounts adding Solana exposure as well. Given demographic shifts, this could provide a means for younger crypto enthusiasts to get Solana allocations into their 401k’s. That’s a whole new level of potential demand.
Of course, the regulatory pieces still need to fall into place before celebration. And competing layer-1 chains like Polkadot or Cardano may make their own ETF plays too. But with its impressive growth and appetite for innovation thus far, you can consider me bullish on Solana’s prospects if given its mainstream investing moment via an ETF. The awareness and influx of interest could fully solidify its standing as the go-to hub for lightning fast, low cost experimentation alongside Ethereum.
Cryptos Less Likely to Benefit Bitcoin ETF Approval
It might also interest you to know that not all cryptocurrencies stand to gain equally from potential ETF approvals. The biggest benefits seem concentrated among the top tier blockchain networks we’ve discussed like Bitcoin and Ethereum. However, more speculative crypto assets and smaller niche projects are less likely to see any material boost.
Dogecoin
Meme coins like Dogecoin provide a prime example. While inexplicably popular among retail traders, joke cryptocurrencies have no real utility or value proposition beyond hype and mania. As such, they are extremely unlikely to have dedicated ETF products approved or any institutional flows. Without fundamentals beyond internet jokes, interest in Dogecoin and similar meme assets stays confined to the fringe.
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The same diminishing returns apply to more obscure or fresh blockchain projects. Regulators will be cautious approving niche asset ETFs lacking track records and liquidity. And even in a hypothetical crypto ETF expansion, issues like capped supply and staking rewards make direct mirroring of certain altcoin prices messy. While the rising tide may lift all boats to a degree, smaller cap coins just quite simply won’t benefit to nearly the same magnitude.
Of course, speculation and early stage projects continue to have an enduring appeal within crypto circles. Long-shot bets can occasionally produce astronomical returns. But when assessing the pragmatic impacts of ETF product approvals, established top 10 market cap leaders should be the primary beneficiaries rather than speculative plays and moonshots outside of the mainstream consciousness. The push toward mass adoption favors projects with dominant network effects – not just viral memes.
Challenges and Risks
While the potential impacts of ETF approvals are exciting to consider, it’s important not to get ahead of ourselves. This optimism needs to be balanced by acknowledging there are still plenty of challenges and risks at play.
For starters, nothing is guaranteed when it comes to the bureaucratic gears of the SEC. Despite mounting pressure and a proliferation of filing applications, ETF rejections remain a very real possibility. And even if given the initial go-ahead, threats of stricter financial regulations could jeopardize progress. Issues like “systemic risk” and liquidity concerns continue to make crypto assets a regulatory wildcard.
Additionally, unforeseen technology developments could erode the advantages of top cryptocurrencies like Ethereum. So-called “ETH killers” like Solana and Avalanche are nipping at Ethereum’s heels. And quantum computing poses inevitable security threats that could upend established networks down the road as well. Not to mention, high profile exploits and protocol hacks continue to occur in the crypto industry – testing confidence among investors.
Take Away
At the end of the day, while the most prominent cryptocurrency projects seem poised to benefit tremendously from ETF exposure, nothing is guaranteed. Bitcoin may promise a digital gold narrative, but unpredictable forces can whipsaw market sentiments and dampen institutional excitement at a moment’s notice.
Nonetheless, the upside potential remains too substantial not to take note. The approved introduction of cryptocurrency ETFs could truly be the watershed moment that provides crypto assets mainstream acceptance and trust. If such approvals trigger even a fraction of the anticipated investment inflows, we may look back at ETFs as the definitive catalyst behind blockchain and digital assets coming of age. What a time to be monitoring these developments closely!