E&Y’s Brody Thinks Bitcoin ETF is the Key

Bitcoin’s significant appeal to institutional investors is currently hampered by the lack of a spot BTC exchange-traded fund (ETF) approval in the U.S., observes Paul Brody, a senior executive at Ernst & Young (EY).

Brody, EY’s head of blockchain initiatives, stated in a recent CNBC’s Crypto Decrypted episode that Bitcoin has amassed considerable institutional interest. However, the U.S. regulators’ reluctance to greenlight a spot Bitcoin ETF has held back the inflow of institutional capital.

He emphasized, “The vast institutional capital, potentially running into trillions, is on standby, eager to dive into Bitcoin. But these funds need a regulatory-approved vehicle like an ETF before they can invest.”

Brody further elaborated that the primary motivation behind institutional Bitcoin purchases is viewing it as an asset, not a transactional currency. He contrasted this with Ethereum, noting that it’s largely procured for its potential as a business transaction and decentralized finance (DeFi) platform.

The crypto world is keenly monitoring the U.S. Securities and Exchange Commission (SEC) and its stand on crypto regulations. Up to now, the SEC hasn’t sanctioned any spot Bitcoin ETFs. Several prominent entities, such as Grayscale Investments, ARK Investment, BlackRock, and Fidelity, are in line, having submitted their Bitcoin ETF proposals to the SEC and are patiently awaiting feedback.

In August 2023, Grayscale achieved a significant milestone by winning an SEC lawsuit for a spot Bitcoin ETF review. Following this, the firm expressed its intent to list its Grayscale Bitcoin Trust on the New York Stock Exchange Arca through an S-3 form registration statement.

Bloomberg’s senior ETF analyst, Eric Balchunas, sees a silver lining. He points out that the recent modifications in the spot Bitcoin ETF by firms like ARK Invest and 21Shares indicate progress. Balchunas believes that these mid-October 2023 amendments are a direct attempt to address specific SEC reservations.