21Shares President Says Bitcoin ETF Market Will Shrink Before Expanding

21Shares President Says Bitcoin ETF Market Will Shrink Before Expanding

Since their approval in January, spot Bitcoin exchange-traded funds (ETFs) have proven to be a success so far.

But, according to Ophelia Snyder, the President of 21Shares, next year might see a smaller field because of the gap seen between some of the biggest issuers in the market and the rest.

Snyder said that they should expect to see around three to five winners in the spot Bitcoin ETF market and that would be it.

The events

According to Snyder, since the launch of the Bitcoin ETFs last month, the events in the market have been both expected and unexpected.

The ETFs have seen a positive amount of investments, but she said that it was also interesting to see how ‘receptive’ the market had been, even without some of the biggest financial players getting involved.

She said that they had yet to see a lot of players they had expected to welcome to the community, but it had still turned out to be the most successful ETF launch in history.

Snyder said that this was just the starting gun going off and there was more to come in the spot Bitcoin ETF market.

With these investment products, investors can get exposure to Bitcoin without having to buy or hold the crypto token directly.

This eliminates some of the biggest hurdles that crypto investors usually face, such as navigating crypto exchanges, setting up a digital wallet, and then working on seed phrases.

The approval

For a decade, the SEC had been turning down spot Bitcoin ETF applications and had not permitted them to enter the US market. It cited risks of potential market manipulation as its primary reason.

But, in a historic move, the securities regulator had approved such products to start trading in the US market earlier this year.

One of the biggest winners in the market has been 21Shares. It crossed the milestone of $1 billion in assets under management on February 9th.

This put the company in line with other big players in the market like BlackRock, Grayscale and Fidelity. A week later, Bitwise also joined the same tier.

The success

The success is no less than a crowning achievement for Ark Invest because it has been working on bringing ETFs to the market for years.

In June 2021, it had filed an application with the SEC for the first time and had filed another one in April 2023, both of which were turned down.

Last June, BlackRock submitted its application and this prompted Ark Invest to submit an amended filing that addressed the concerns of the SEC regarding market manipulation.

The early investment in ETFs has mostly come from mom and pop investors and retail traders, rather than brokers or advisors on Wall Street.

Snyder said that this was to be expected and is not unusual. She explained that the market is retail-heavy and they have faster access than advisors.

Moreover, she added that the scale of inflow reflected the pent-up demand that had been ‘compressed’ and was now released.