Ripple CEO Talks about BTC ETF Overtaking Silver as the Second Largest Investment Asset

2024-01-31, 03:06

[//]:content-type-MARKDOWN-DONOT-DELETE
![](https://gimg2.gateimg.com/image/article/1690791857hotspot.jpeg)
## [TL; DR]
The total market value of Bitcoin ETFs has surpassed that of silver ETFs.

Garlinghouse believes that the crypto industry is willing to comply with national crypto regulations.

For a long time the SEC was unwilling to approve spot <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> ETFs due to fear of market manipulation.

## Introduction
Although spot bitcoin exchange traded funds were launched in the United States on 11 January after their approval on the 10th they have attracted much investment to the extent of surpassing some investment assets that have been on the market for years.

For example, the BTC ETFs have overtaken Silver ETFs that have been on the market for years. This article will compare the performance of silver ETFs and that of spot bitcoin ETFs. We shall also explore the impact of BTC ETFs on the crypto market.

Read also: [Spot Bitcoin ETFs' Approval Becomes A Milestone](https://www.gate.io/blog_detail/3698 "Spot Bitcoin ETFs' Approval Becomes A Milestone")

## Ripple CEO Optimistic about the Performance of Spot Bitcoin ETFs
A few weeks after the United States SEC approved spot bitcoin ETFs they have become the second largest commodity ETF on the market after overtaking silver ETFs. What mainly enabled spot bitcoin ETFs to surpass silver ETFs is their number. As a fact, the SEC approved 11 spot bitcoin ETFs within the same day.

Also, the conversion of Grayscale Bitcoin Trust into a spot BTC ETF resulted in a sudden injection of almost $30 billion into the sector. This is far more than the value of  silver ETFs estimated to be $11 billion, according to etfdb.com. Now, the only commodity ETF that surpasses bitcoin ETF is gold with an estimated total market value of around $95 billion, spread over 19 ETFs.

Related article: [Bitcoin returns to its golden path?](https://www.gate.io/learn/articles/bitcoin-returns-to-its-golden-path/1563 "Bitcoin returns to its golden path?")

To this effect, [Ophelia Snyder, 21Shares co-founder –](https://twitter.com/OpheliaBSnyder/status/1748071064578466083 "Ophelia Snyder, 21Shares co-founder –") who in partnership with Ark Invest launched one of the 11 spot BTC –  said, “This was way beyond my short term expectation but is a fantastic validation of bitcoin’s role as a reserve product and of the demand for bitcoin exposure in financial markets.”

Significantly, the SEC’s bitcoin ETF approval marked one of greatest developments in the sector since the creation of the blockchain. The significance of the bitcoin ETFs was shown by a net inflow of $894 million within the first three days of their launch.

Brad Garlinghouse, Ripple CEO, remains optimistic about the recently launched bitcoin ETFs. Essentially, the bitcoin ETF approval allows investors to gain exposure to BTC without the hassle of buying and holding it.

In fact, Garlinghouse explained one reason he is sure BTC ETFs will perform well going into the future. Commenting on X, [he said](https://twitter.com/morningsmaria/status/1747979054874067159?s=46&t=3iAFD_WHRWDFSLixlrJyWg "he said"), “It’s a very big deal, in large part it is further validation from institutions, and in this case, a government entity.” The launch of these crypto ETFs will allow large institutions to invest in bitcoin.

Related news: [What does Bitcoin ETF introduction mean for Investors](https://www.gate.io/blog_detail/3728/what-does-bitcoin-etf-introduction-mean-for-investors "What does Bitcoin ETF introduction mean for Investors")

## Crypto Industry is committed to Regulatory Compliance: Garlinghouse 
Apart from his unwavering <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> in spot bitcoin ETFs, Garlinghouse stressed out that the crypto industry is willing to comply with crypto regulations, irrespective of where they are enacted and enforced.

He commented on several countries, including Japan, Switzerland and the United Kingdom for creating clear crypto regulations that stipulate how investors and crypto businesses should behave. 
![](https://gimg2.gateimg.com/image/article/1706670242At299zNsy9.jpg)
Source: X.com

Irrespective of his optimism towards the flourishing of bitcoin ETFs in the United States and the rest of the world, Garlinghouse has criticized the US government regulators on the way they handled the bitcoin ETF process.

Read also: [A Comprehensive Analysis of Key Information on BTC Spot Bitcoin ETF](https://www.gate.io/learn/articles/a-comprehensive-analysis-of-key-information-on-btc-spot-etfs/1576 "A Comprehensive Analysis of Key Information on BTC Spot Bitcoin ETF")

This is because Garlinghouse believes that regulators should align crypto regulations and other national policies with public interests. Now, his criticism is that the US government regulators are failing to align the crypto laws with interests of the public and the emerging global trend.

His perspective is that due to the decentralized nature of digital assets like cryptocurrencies it is best for countries to align their crypto regulations to create a synergetic and effective legal system that fosters innovation and protects the investors. Garlinghouse’s comments follow the [prolonged SEC against spot bitcoin ETF approval delays](https://www.gate.io/learn/articles/these-are-the-high-profile-spot-bitcoin-etf-applications-currently-in-pllay/1258 "prolonged SEC against spot bitcoin ETF approval delays").

## What is a Spot Bitcoin ETF? 
We have discussed Garlinghouse’s optimism in spot bitcoin ETFs. Also, we looked at how the bitcoin ETFs have overtaken silver ETFs in terms of total market value. Now, let’s briefly delve on what bitcoin ETFs are?

A spot bitcoin ETF is an exchange traded fund that tracks the value of bitcoin. What this means is that if there is no market [manipulation the bitcoin price should correlate with the value of shares that constitute a bitcoin ETF](https://www.gate.io/learn/articles/the-imminent-decision-by-the-us-sec-on-bitcoin-etfs-and-its-potential-impact-on-bitcoin-prices/1572 "manipulation the bitcoin price should correlate with the value of shares that constitute a bitcoin ETF").

A spot bitcoin ETF allows investors to gain exposure to bitcoin without facing the risks of holding it. However, spot bitcoin ETFs are only traded on traditional stock exchanges, not on crypto exchanges. It’s also worth noting that spot BTC ETFs are regulated investment assets, a reason why they attract many investors.

## How BTC ETFs Impact On Crypto Market?
The spot bitcoin ETFs will enable many traditional investors including large institutions to invest in the crypto asset. The reason is that the ETFs are offered on traditional stock exchanges where many investors own other assets like shares. For instance, companies like BlackRock and Fidelity which are household names in the sector offer spot bitcoin ETFs.

Second, the BTC ETF applications approval will help boost liquidity in the bitcoin market. Such increase in liquidity will facilitate efficient trading for both small and large investors.

Similarly, the increase in liquidity and trading volume may also lead to efficient price discovery which helps to stabilize the volatility of the crypto asset. As a result, it will lead to a stable bitcoin market that will attract more investors.

The bullish momentum which the bitcoin ETFs may sustain could facilitate the growth of the crypto sector. In fact, the optimism that currently exists in the bitcoin market may demystify BTC investment and spur growth of the industry. In all, the spot bitcoin ETFs have legitimized bitcoin in the eyes of long-time pessimists.

In the long run, spot bitcoin ETFs may indirectly result in sustained BTC price rise. This is because the launch of the crypto ETFs will lead to greater adoption of bitcoin as a diverse section of the society invests in it. Some businesses will have confidence to accept it as a means of payment for goods and services. It is the surge in the demand for BTC that will lead to its price rise.

Further to the above, the launch of the spot BTC ETFs will increase public knowledge about bitcoin and other cryptocurrencies through the media and investment forums, among others. This may help to increase its adoption.

The approval of bitcoin ETFs may enhance regulatory clarity in the sector. For example, the United States SEC has designated the spot bitcoin ETF as a commodity ETF. This has, indeed, confirmed that bitcoin is a commodity rather than a security. Similarly, if the  SEC approves a spot ETH ETF that may, as well, legally endorse ETH as a commodity.

## How does the Bitcoin ETF value correlate with BTC price? 
The bitcoin ETF issuers have a system to ensure the price of bitcoin correlates with the value of the ETFs. Specifically, the value of a firm’s issued ETF shares should correspond with the number of bitcoin it holds.

To align the values of the shares to the number of coins it has and to reflect on the prevailing bitcoin market value the issuer will constantly sell or buy the asset. Some authorized participants (APs), which are big financial institutions, facilitate the creation and redemption process. Also, some market makers ensure there is balance in the ETF market through buying and selling of ETF shares.

## Why was the SEC against Spot Bitcoin ETFs? 
For a long time, the SEC showed reservations about approving spot bitcoin ETFs. It feared market manipulation which could expose the investors to financial risks.

The US government regulators were also concerned about the nascent nature of the crypto market. Therefore, the  SEC wanted to protect the investors yet foster innovation. Also, the fact that the crypto market was not yet mature by then could have influenced the SEC’s behaviour.

Concentration of ownership of bitcoin in the hands of a few investors (sharks and whales) and arbitrage between the prices of bitcoin and the ETFs are ways in which market manipulation may occur.

## Conclusion
The market value of spot bitcoin ETFs have surpassed that of silver ETFs, creating optimism in the crypto market. Also, the launch of the ETFs has helped to demystify bitcoin which may attract many investors into the sector. Now, what is important for the BTC issuers, market makers, authorized participants (APs) and stock exchanges is to ensure there is no market manipulation.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

分享一下