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Bitcoin ETF Race: Why Some Pioneers Are Choosing to Stay on the Sidelines

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Looking to get in on the bitcoin ETF race? Some pioneers are taking a step back and sticking to the sidelines, but there are still plenty of opportunities to explore. Get the human touch on the latest developments in the world of cryptocurrency investing.



Cryptocurrency ETF pioneers are approaching the upcoming market battle for a spot bitcoin exchange-traded funds cautiously. Although the demand for a bitcoin ETF is expected to be significant, some industry experts are skeptical about the profitability and the high upfront costs of launching such products.

Executives at ProShares, Amplify Investments, and Roundhill remain hesitant to dive into the spot bitcoin ETF competition, citing concerns over the crowded field, the regulatory and marketing costs, and doubts about strong enough demand. Their skepticism suggests that the hype surrounding a spot bitcoin ETF may be overstated, and that the products may be unprofitable for some issuers who rush into the space.

While the SEC has long rejected spot bitcoin ETF applications, industry hopes increased in June when BlackRock filed for a spot bitcoin ETF. In August, a court ruling required the SEC to review Grayscale Investments’ application to convert its Bitcoin Trust into a spot bitcoin ETF. Despite these developments, some executives, like the CEO of ProShares, remain unconvinced that the SEC will approve a filing soon.

When the SEC does approve a bitcoin ETF, executives expect it to approve several at once, driving up marketing expenses. This, combined with upfront costs, means that the bill for launching an ETF could climb to millions of dollars. To some ETF providers, it is unclear if they would be able to grab sufficient market share to make the economics work.

With the uncertainty surrounding the future of spot bitcoin ETFs, some issuers are focusing on other cryptocurrency ETF opportunities. Ultimately, individuals and companies are eagerly awaiting SEC decisions and remain cautious about the potential success and challenges of launching spot bitcoin ETFs.

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