Thomas Lee Shares Why Over Half of the Bitcoin ETF Trading Volume Will Be Institutions Upon Approval
The decision of a new Bitcoin (BTC) could be delayed once again by the U.S. Securities Exchange Commission (SEC) as soon as next week. There are several analysts that believe that a Bitcoin ETF would be very positive for Bitcoin and digital currencies. Specifically, Thomas Lee believes that institutions will be responsible for over 50% of the Bitcoin ETF trading volume.
Thomas Lee Believes Institutions Would Trade Bitcoin ETFs
Thomas Lee, the Head of Research at Fundstrat Global, said that he believes 50% of the ETF volume comes from institutional investors such as hedge funds. That means that an ETF is not necessarily a retail product. At the same time, he said that a Bitcoin ETF would be a big deal because it would simplify key management for a retail investor.
I believe >50% of ETF volume is institutional investors (HF, etc) so it is not necessarily a retail product. And similarly, a bitcoin ETF would be a big deal. Especially since it does simplify key management for a retail investor https://t.co/ksmt10ypnU
— Thomas Lee (@fundstrat) May 7, 2019
Thomas Lee gave this comments after Bloomberg’s Joe Weisenthal questioned the motives behind a Bitcoin ETF. Weisenthal believes that an ETF would only help investors purchase Bitcoin. However, there are different benefits related to a Bitcoin ETF that the Director of Digital Assets Strategy, Gabor Gurbacs, mentioned.
These include automatic dividend reinvestment, lower cap gains tax using in-kind transactions, larger liquidity through the AP system, protections of security status, laws and regulations, and improved pricing and management standards.
For over a year, the Chicago Mercantile Exchange (CME) offered Bitcoin futures trading and the volume that the platform registered increased month after month. This shows that there was genuine interest from investors in Bitcoin and digital assets.
The SEC is expected to be delaying the decision of a Bitcoin ETF. The deadlines for the current two ETF proposals are October 13 and 18.