Recent developments in the Bitcoin sector indicate a promising shift in the fate of markets after approval of the Spot Exchange-Traded Funds (ETFs). The financial world anticipates the Bitcoin Spot ETF approval in early 2024, triggering a colossal marketing battle for assets under management.
Highly-anticipated Bitcoin Spot ETF Approval
As anticipation around the approval of Spot Bitcoin ETFs builds, experts, including Bloomberg Intelligence analyst James Seyffart, predict a potential breakthrough in the Bitcoin ETF saga. Notably, the recent accelerated meetings between the United States Securities and Exchange Commission (SEC) and investment funds vying for Bitcoin ETF listings signify a proactive approach by regulators.
Meanwhile, Reuters cites unnamed executives, suggesting that these intensified discussions have prompted ETF applicants to tweak their filings, aligning them with feedback from regulatory authorities.
Adding to this momentum is the aftermath of an August federal court ruling that directed the SEC to reconsider Grayscale’s previously rejected Bitcoin ETF application. This legal shift provides less ground for regulators to reject other outstanding applications, setting a more favorable precedent for prospective ETFs.
Analysts suggest that the coveted approval window lies between January 5 and 10, 2024. This coincides with Cathie Wood’s ARK Invest application’s deadline.
$500M to $1B in Revenue for ETF Winners
It is important to note that CoinShares’ Head of Research, James Butterfill, sees a massive capital inflow into the Spot ETFs, positively affecting the BTC price dynamics.
He cites the Fund Flows Model, predicting that Spot Bitcoin ETFs could create a $14.4 trillion market. Even if just 10% of fund holders invest 1% of their wealth, the potential inflow surpasses $14.4 billion. If accurate, this would set a new record, surpassing the 2021 high of $7.24 billion, constituting 11.5% of assets under management (AUM).
On a separate note, drawing parallels to Grayscale’s GBTC with a $40 billion market cap during the 2021 bull market, the potential annual revenue for ETF winners (considering a 1% management fee) ranges from $500 million to $1 billion. Entrepreneur Pomp states:
“Given these prior data points, we can assume the $50 billion–$100 billion number for ETF inflows. GBTC currently charges a 2% management fee. ProShares charges 0.95%. Let’s handicap the probable fee structure at a 1% management fee for easy numbers. This means $500 million to $1 billion is up for grabs in annual revenue for the winners of the ETF asset race.”
The Marketing Storm on the Horizon
Building on this imminent approval scenario is the prospect of an unprecedented marketing blitz.
Estimated to attract $50 billion to $100 billion within the first 12–24 months of approval, this marks a historic event in financial marketing. Notably, the approval of a futures bitcoin ETF brought around $1 billion into the fund in the first 48 hours.
With billions of dollars at stake, major players like BlackRock, Fidelity, and ARK Invest are ready to engage in an epic battle for market share, potentially spending over $100 million collectively.
Bitcoin investor Pomp anticipates PR wars, CEO appearances on financial media, TV commercials, Super Bowl ads, newspaper takeovers, and a flood of content across social media platforms.
Interestingly, an X user highlighted the notable steady uptick in Grayscale’s marketing by sharing a picture of GBTC’s ad banner at Atlanta airport.
Recurring Revenue
Beyond the anticipated initial $500 million to $1 billion, the ETF winner stands to secure this amount annually for the foreseeable future. A clear winner tends to maintain dominance in ETF assets under management, as liquidity attracts more assets over time.
As the digital-asset community awaits the groundbreaking Bitcoin Spot ETF approval, the convergence of regulatory shifts, legal precedents, and strategic marketing maneuvers sets the stage for what could be the most transformative period in the history of the Bitcoin market.
