Platforms Will Buckle to Spot Bitcoin Demand

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Despite a recent decline in asset flows into spot Bitcoin ETFs, traditional financial hedges are increasingly struggling to ignore the growing interest in cryptocurrency assets among investors.

Exhibit A is a recent report showing that Morgan Stanley is reevaluating its policies for financial advisors on recommending spot bitcoin ETFs to their clients. Morgan Stanley currently allows advisors to invest on behalf of clients as long as the request comes from the clients.

Morgan Stanley declined to comment on how the company polices this vague policy and might allow advisors to begin recommending ETFs directly to clients.

The firm is not alone in its cautious approach to the most popular ETF category ever. Major platforms such as Raymond James Financial, LPL Financial and The Vanguard Group are among the firms that continue to restrict access to spot bitcoin funds to varying degrees.

Last week, after nearly $12 billion in net inflows over 71 days, some spot Bitcoin ETFs experienced their debuts. Still, the speed at which the 11 funds currently traded make up this total has platforms reluctant to reconsider their stance.

Spot Bitcoin ETF Access Demand Increases

It doesn’t hurt that Bitcoin is up more than 38% this year. Platforms are likely finding it difficult to ignore investors’ insatiable appetite for exposure to cryptocurrency due to its massive profit potential.

Similar to many old-school financial advisors who still try to ignore cryptocurrency as a potential investment, brokerage platforms will find it increasingly difficult to deny access.

On Tuesday, the cryptocurrency space took another big step forward with the launch of separate bitcoin and Ethereum ETFs in Hong Kong. China Asset Management’s ETFs opened on Hong Kong exchanges as the two most active funds during the trading day.

Bloomberg Intelligence analyst Eric Balchunas sent It is noted on social media that the dual launch in Hong Kong offers the first opportunity to gauge investors’ appetite for bitcoin and ether-based products (ether is the native token of the Ethereum smart contracts blockchain). It looks like the first advantage goes to spot Ethereum funds, but that may be because spot Ethereum ETFs are the first of their kind.

The Securities and Exchange Commission is still reviewing multiple applications for spot Ethereum ETFs to be offered on U.S. exchanges, and it remains unclear how the agency will decide. What is clear, however, are the market forces behind such products.

The story continues

Morgan Stanley, Raymond James, LPL and Vanguard are certainly paying attention to the SEC’s deliberations as they consider expanding their clients’ reach.

Kudos to the firms taking the most cautious approach to cryptocurrency investing, but rest assured, it’s a matter of when, not if, they’ll eventually get on board.

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