Bitcoin surges, now hovering below $35,000, around optimism of the SEC approving a spot bitcoin ETF. Currently, BlackRock's (BLK) iShares Bitcoin Trust is listed on the Depository Trust & Clearing Corporation's (DTCC) website.
Opimas CEO Octavio Marenzi illustrates how crypto investors may be in for a "bit of disappointment" after enthusiasm has driven bitcoin prices higher.
"The difference is really that it's BlackRock behind it, it's the world's largest asset manager," Marenzi tells Yahoo Finance. "There's some sentiment that was going to basically make bitcoin investments sort of legitimate for institutional investors as well. That's something we have been waiting for years and there have been some hedge funds and some investors playing the space, but by and large, most of the long-only funds... [and] large institutional investors have sat by the sidelines and we're expecting them to jump in now."
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Video Transcript
RACHELLE AKUFFO: Not to take too much of the wind out of the sails of the optimism that we're seeing here, but give us a reality check as to how well-founded this optimism at least for the token bitcoin is just based on this news of the stronger potential of a spot bitcoin ETF.
OCTAVIO MARENZI: Well, it does feel like they're clasping at straws a bit in terms of pushing the price up. I mean, there are other bitcoin ETFs out there. They're basically in the futures markets as opposed to being in the spot market. But really, in terms of price exposure to bitcoin, you can get that. And there have been ETFs out there for a few years now that have allowed retail investors to do that, and institutional investors as well, for that matter. They really haven't attracted that much attention. Some of them have around a billion dollars in assets. Most of them that have in the tens of millions haven't fared terribly well.
So I think this idea that this new ETF, spot ETF, is going to draw a whole bunch of new investors into the bitcoin market and drive up the prices, generate enough investment volume that's going to push up the price, I think are likely a bit disappointed. It just is not that big a market for that kind of investor. Most of the people who want to get exposure to bitcoin are quite happy to do it directly and buy bitcoin directly through an exchange or through a separate account to do that. So I think there might be a bit of disappointment. We might be getting a bit ahead of ourselves in terms of the boost that this is going to give to the market.
RACHELLE AKUFFO: That is true. We heard similar sentiments from Nicholas Panigirtzoglou, of JPMorgan, saying, "any approval won't be transformational for the sector," citing the same examples. As we've seen with Canada, with Brazil, other countries in Europe that have launched this haven't seen these tremendous inflows. So then what's the driver here? Because it's the difference between getting exposure to bitcoin's movements versus to the token itself. What is the institutional interest here then?
OCTAVIO MARENZI: Well, I suppose it is-- the difference is really that it's BlackRock behind it. So it's the world's largest asset manager. They're pushing forward a new bitcoin ETF, basically. And I think there's some sentiment that this was going to attract and basically make bitcoin investments sort of legitimate for institutional investors as well. And that's something we've really been waiting for years.
There have been some hedge funds and some investors-- institutional investors playing in this space. But by and large, most of the long-only funds, most of very large institutional investors have sat by the sidelines. And we're always expecting them to jump in now. And maybe that's really what they're thinking, that not only is that people are going to invest directly in this ETF, but rather what they're going to do is say, OK, now it's finally a legitimate investable asset class. I can do it. BlackRock's in there. Or pension funds and people like that can now come in in larger numbers. I think that's the expectation there.
But we've seen this many, many times. It's kind of false start many, many times over the course of the past few years, where we think the institutional investor stampede is just around the corner, it's just over the horizon, and it's about to arrive. And I fear that's, once again, what we're seeing here, that there's a sense that now the institutional investors are going to come. Now that BlackRock has got this ETF up and running, we're going to see all these pension funds and institutional investors come in and storm the market and drive the price up. But I think that's led to disappointment a few times in a row now.
Crypto investors 'clasping at straws' on pending bitcoin ETF - Yahoo Finance
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