Could Spot Bitcoin ETFs push the U.S. towards a 99.5% market share?

• The approval of spot BTC ETFs could increase U.S. share of crypto ETF trading volume to 99.5%.
• The U.S.’s attempt to establish itself as a global leader in the crypto ETF landscape awaits the SEC’s decision.

The dominance of the U.S. in global trading volume of crypto-related exchange-traded funds (ETFs) could surge to a staggering 99.5%, provided that spot Bitcoin [BTC] ETFs receive approval, tweeted Bloomberg’s ETF analyst Eric Balchunas.

Another good chart from the report is this one: North America accounts for 98% of all the crypto ETF trading volume in the world. If/when spot ETFs come out in US this will likely go to like 99.5%. pic.twitter.com/nEF7dcaQu4

— Eric Balchunas (@EricBalchunas) August 10, 2023

North America already commands 97.7% of the crypto ETF trading volume, as highlighted by Balchunas.

Spot BTC ETFs could propel US crypto ETFs

The Securities and Exchange Commission (SEC) currently has a list of spot Bitcoin ETF applications pending approval. A decision on the joint ARKB fund from Ark Invest and 21Shares is anticipated by 13 August.

In an interview with Bloomberg, Ark Invest’s Cathie Wood pondered if the regulator might be holding out to approve multiple funds. Balchunas speculated that the percentage of total crypto ETF trading volume could further skyrocket to 99.5% in the U.S.

On 10 August, Bitwise filed an updated prospectus for its ETF fund, transitioning it from a Bitcoin futures ETF to a Bitcoin and Ether Equal Weight Strategy ETF. The move mirrors a similar action taken by Valkyrie on 5 August, when it modified its BTC Futures ETF (BTF) to include Ethereum Futures.

“Cannonball Run in effect,” Balchunas tweeted the following day, indicating the fast-paced changes in the ETF landscape.

Bitwise is pulling a Valkyrie who pulled an $MJ (using name/strategy change to bypass the initial filing process and in this case get out earlier). Cannonball Run in effect. https://t.co/dssrPZya0y

— Eric Balchunas (@EricBalchunas) August 10, 2023

Balchunas also highlighted that the top 15 best-performing equity ETFs this year all share exposure to crypto.

Every single one of the Top 15 best performing equity ETFs this year is crypto-related. $WGMI leading way w +227%. Finally attracting flows too, altho pretty modest considering these perf numbers. This is part of our monthly Crypto ETF Report via @JSeyff & @SirYappityyapp pic.twitter.com/iPIHhH82Jr

— Eric Balchunas (@EricBalchunas) August 10, 2023

At the forefront of this was the Valkyrie Bitcoin Miners ETF, showcasing a YTD return of 227%. The fund invests in the Bitcoin mining sector, including Marathon Digital, Riot, and Cipher Mining.

Coming in second was the VanEck Digital Transformation ETF, boasting a YTD return of 182%.

Further products included the Global X Blockchain ETF and the Bitwise Crypto Industry Innovators ETF. Both of these funds posted a 168% YTD return. Invesco’s Alerian Galaxy Crypto Economy ETF demonstrated a solid performance, delivering a YTD return of 162%.

The escalating presence of crypto ETFs and their remarkable performance underscores the growing significance of cryptocurrencies in the traditional finance markets. The U.S. stands on the cusp of potentially solidifying its dominance in the global crypto ETF market. As the SEC weighs its decisions, the trajectory of the crypto ETF market seems poised for significant shifts.