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Valkyrie's Steven McClurg: Thoughts on the Spot Bitcoin ETF

Valkyrie's Steven McClurg: Thoughts on the Spot Bitcoin ETF

Dec 15, 2023

Valkyrie's Steven McClurg: Thoughts on the Spot Bitcoin ETF

In a recent interview, Steven McClurg, CIO and co-founder of Valkyrie, expressed high confidence in the U.S. Securities and Exchange Commission (SEC) approving a spot Bitcoin Exchange-Traded Fund (ETF) in the early part of the next year. Valkyrie, alongside asset management giants like BlackRock, Fidelity, and Wisdom Tree, has a pending application for such an ETF, and McClurg believes that the approvals could come in between January and March.

McClurg highlighted the comprehensive preparatory steps Valkyrie is undertaking to ensure readiness for an ETF launch, including establishing fund administration, custodianship arrangements, and market makers. These steps are part of a larger checklist that includes initial audits and SEC deposit requirements.

Despite a decade-long push for a spot Bitcoin ETF and skepticism regarding SEC Chair Gary Gensler's stance on crypto, McClurg views Gensler as a proponent of both Bitcoin and the ETF. He cites the launch of Bitcoin futures ETFs under Gensler's watch as indicative of positive movement within the SEC towards a spot Bitcoin ETF. This sentiment is bolstered by recent meetings between the SEC and asset managers, including BlackRock and Grayscale, hinting at a growing institutional demand for a spot Bitcoin ETF.

The approval of a spot Bitcoin ETF, according to McClurg, would be a significant event for Bitcoin but not necessarily for the broader cryptocurrency market. He believes that Bitcoin's cyclical nature, aligned with a potential ETF approval, could substantially drive market growth. Valkyrie's decision to file for a spot Bitcoin ETF was independent of BlackRock's actions, as Valkyrie had initiated its efforts back in January 2021.

Regarding the recent addition of Ether futures to Valkyrie's Bitcoin futures ETF, McClurg explains that it was a strategic response to market demand and the anticipated approval of a spot Bitcoin ETF, which would likely diminish interest in a Bitcoin futures-only product.

McClurg also shed light on why the SEC has approved Bitcoin futures ETFs but not spot ETFs, pointing toward concerns over custody and security. However, with developments such as Grayscale's push to convert its Ethereum trust into an ETF and BlackRock's filing for a spot Ether ETF, the industry is seeing signs of a shifting regulatory landscape.

On the market front, McClurg attributes recent movements in Bitcoin's price to three factors: ETF anticipation, the cyclical nature of Bitcoin, and expectations of a federal rate cut, which could boost risk assets.

As for the future, McClurg is bullish, predicting that Bitcoin's price will surpass $100,000 by the end of next year and agrees with Bernstein's forecast of reaching $150,000 by 2025. He envisions continued adoption and innovation within the crypto space for 2024.

Finally, the interview touched upon CoinShares' potential acquisition of Valkyrie's crypto ETF wing, which McClurg views as a strategic partnership to strengthen Valkyrie's position in a crowded field of issuers.

Stephen McClurg's optimism about the approval of a spot Bitcoin ETF in the U.S. reflects a broader industry anticipation of regulatory advancements and a potential surge in Bitcoin's market trajectory. Valkyrie's proactive approach and strategic alliances signal a firm gearing up for a transformative event in the crypto ETF landscape.


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