IMPORTANT POINTS:
- Cryptocurrency ETFs on Wirehouses: Cathie Wood predicts that large brokerages will focus primarily on Bitcoin and Ethereum ETFs.
- Importance of Due Diligence: Large platforms like Morgan Stanley and UBS are conducting a thorough review before listing cryptocurrency ETFs.
- Future of Bitcoin and Ethereum ETFs: Although Ethereum ETFs have not been launched yet, signs point to a possible approval and launch in the near future
Cathie Wood’s Perspective on Cryptocurrency ETFs at Big Brokerages
During a recent interview with Peter McCormack at the Consensus 2024 cryptocurrency conference, Cathie Wood, CEO of ARK Invest, shared her vision on the future of digital asset exchange-traded funds (ETFs). Wood noted that large brokerages, or wirehouses, will likely focus exclusively on ETFs of major cryptocurrencies, such as Bitcoin (BTC) and Ethereum (ETH), and may consider including Solana.
Focus on Bitcoin and Ethereum
To date, Bitcoin ETFs are the only ones that have launched, but according to Wood, Ethereum ETFs may launch before the end of the year. Although it is anticipated that other ETFs for different cryptoassets could follow, Wood is skeptical that large platforms will expand their offerings beyond Bitcoin and Ethereum. According to Wood, these brokerages want to offer their clients careful exposure to this new asset class, without venturing beyond the main crypto assets.
Wood also mentioned the crucial role that private funds will play in exploring cryptocurrencies. These funds could research up to 20 or 30 different crypto assets, but this will require extensive due diligence due to the number of unsound projects in the space. This selective approach is vital to ensure that only projects with solid fundamentals are invested.
Due Diligence and Future of Cryptocurrency ETFs
Finally, Wood commented on the progress in talks with large platforms such as Morgan Stanley, UBS, Merrill Lynch and Wells Fargo. These institutions are conducting extensive due diligence, indicating growing interest and potential institutional support in the future. Although no spot Bitcoin ETFs have yet been listed on these platforms, Wood is optimistic that the situation will change soon, given the type of questions these brokerages are asking.
Cathie Wood’s interview suggests a cautious but significant transition towards the incorporation of cryptocurrencies as an asset class through ETFs in large financial brokerages. This move could mark a turning point for institutional investment in crypto assets, especially when it comes to more established assets like Bitcoin and Ethereum.
