- The SEC has loosened the requirements for new exchange-traded funds.
- Inflows for ETFs are on track to beat 2024.
- Potential XRP and Solana ETFs are garnering hype from investors.
Forget the dip, cryptocurrencies are in for a bullish fourth quarter.
That’s according to James Butterfill, head of research at CoinShares, who told DL News that the initial shoulder-shrug of a reaction to the Federal Reserve’s interest rate cut will prove short-lived.
“While the immediate response to looser monetary policy hasn’t been positive due to an unwinding of leverage, digital assets will garner support in the coming months,” Butterfill said.
He added that the two main drivers will be cooling inflation and “more dovish rhetoric from the Fed.”
The upshot? “It is possible for Bitcoin to reach $168,000 by year end, Butterfill said.”
Many other market watchers have forecasted higher prices. Shawn Young, chief analyst at MEXC told DL News that Bitcoin is heading to $135,000, while Standard Chartered and Bernstein analysts predict that the top crypto will top $200,000 before 2026.
This week, investors were hopeful that the Fed’s interest rate cuts would bring greener pastures for the crypto industry, but that hasn’t been the case.
Bitcoin is down 6% in the past week, trading at about $109,600, while Ethereum slumped 12% to around $3,900. The broader cryptocurrency industry has lost about 1% of its total market value, now sitting at $3.8 trillion.
Generic listing standards
Still, there’s optimism on the horizon.
That’s because the Securities and Exchange Commission has moved swiftly to help the crypto industry launch more ETFs faster. On September 17, the agency approved a generic listing standard that dropped approval time periods to 75 days from 240.
James Seyffart, Bloomberg Intelligence ETF expert, said these fresh rules should greenlight over one hundred crypto ETFs in the next six to 12 months.
Meanwhile, Butterfill reckons the generic listing standards will help push the exchange-traded product sector over the edge with regards to its inflows from last year.
Last year, ETPs took in over $48 billion, while today that figure sits at $40 billion.
With the SEC’s new rules, however, “we are on track to match or marginally beat last year,” Butterfill told DL News.
“As the year draws to a close, looser monetary policy coupled with the hype around the XRP and Solana ETF launches in the US, we could see up to $60 billion of inflows for the full year,” he said.
Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Got at a tip? Email him at psolimano@dlnews.com.