Bitcoin Spot ETF Poised To Lure In Fresh Institutional Investors

President of the Chicago Board Options Exchange (CBOE) John Palmer has revealed his optimism on the approval of the Bitcoin Spot Exchange-Traded Fund (ETF) and its effect on the cryptocurrency landscape.

Bitcoin Spot ETF Will Pave For Pension And RIA-Based Funds

The CBOE Digital’s president shared his optimism in a recent interview on Bloomberg TV on Tuesday, January 2. His remarks are made one week before the SEC’s mandatory deadline of January 10, in which the regulatory watchdog is expected to decide whether or not to approve the spot BTC ETF.

According to him, Bitcoin Spot ETF will attract new institutional investors following approval from the United States Securities and Exchange Commission (SEC).

Palmer stated:

I think seeing that approval is going to pave the way for pension funds and RIA-based funds to be able to invest in assets in a spot Bitcoin ETF where they may not be able to gain that access today in just a native, spot Bitcoin token.

Furthermore, he has asserted that any potential approvals for an ETF could change how institutions approach derivatives, such as futures contracts and options.

In the interview, Palmer highlighted that an ETF approval sparks a broader crypto ecosystem. Due to this, there are more large investors and institutional players who are used to hedging risks.

Palmer expects a large growth in Bitcoin derivatives products with a possible spot ETF approval. He asserted that the institutional players will eventually “lean on to these derivatives more and more” to hedge risks.

When asked about the breakdown between more institutional investors and retail investors on the derivatives aspects, Palmer stated that “the breakdown is difficult to decide yet.” This is because “we are on the wait and see,” but he believes “institutions will generally lead the way” with participants in the spot Bitcoin ETF utilizing the hedging tools.

However, he also noted that the “retail will also look for that as well.” He further highlighted a broader international following in retail in terms of obtaining access to derivatives in cryptocurrency.

SEC Decision On ETF Approval Not Certain

Fox Business journalist Eleanor Terrett recently underscored her take on the approval of the Bitcoin spot ETF by the SEC. The journalist took to X (formerly Twitter) to weigh in on the affair.

In the X post, Terrett underlined how unpredictable the SEC’s decision-making process is. “While the SEC is surely unpredictable, it would surprise me if approvals were to happen tomorrow,” she stated. 

Terrett noted that through conversations she has had with issuers, the SEC needs to evaluate and provide feedback on the modifications made to the S-1s, submitted on Thursday and Friday.

Furthermore, the regulator may inform the issuer of the S-1 form’s final submission date after this review phase, which might take place “in the next 24 to 48 hours.” However, this is if the SEC decides to mirror the approval timeline to the Ethereum futures in October.

Featured image from iStock, chart from Tradingview.com