Gary Gensler, the chairman of SEC, has given multiple interviews recently where talks about the approval of a flurry of Spot Crypto ETFs from Blackrock, Grayscale, Ark, Vanguard etc…
It's only a matter of time before they get approved because all the worries from the SEC has been addressed :
1 – they worried that these new products could hurt retail investors. That's no longer true. Having ETFs backed by the likes of Blackrock, Ark, and other hedge funds is a good thing for investors, as it prevents situations like FTX where the “exchange” dips into the asset under custody to cover their loss on another speculative bet.
US based Large Institutions are forced to be completely transparent and have to disclose their Assets under Custody to the SEC, through 10-k, 10-q filings.
The approval is only a question of time now. SEC already didn't appeal the ruling from a judge that requires the SEC to review Grayscale's spot Bitcoin ETF application.
2 – That leads me to my next point. Who will trade these ETFs? Sure, some of it will be from Hedgefunds and Asset Management Firms who want to have 0.1% of their portfolio in Crypto out of FOMO, but I think most of the trading will come from retail. Think your average jo who wants an easy way to mimic the price & volatility of BTC or ETH without having to go full cryptobro and deal with all the hassle creating & maintaining a crypto wallet.
Yes, a BTC is still worthless in the sense that it has no inherent value, but people won't care because they will be able to make money off of it with options and leverage. As long as people can make money, whether it's on the long on short side, there's going to be activity in these ETFs.
Also, it provides a simple way to SHORT crypto, which wasn't something easy to do until now.
Retail brokerages like HOOD will be the big winner of this new crypto boom and will be reaping in that sweet sweet commission as trading volume & assets under Custody goes up.
Not only that, sooner or later, people will realise that the 5.5% in MMF doesn't cut it when the real yield is 1.8%. There will be a risk on sentiment and a rush to Stock, crypto, ETFs, and HOOD will win either way.
TLDR : The coming Crypto bullrun will be the new gold rush, and HOOD will be selling shovels
Can anyone poke holes in this theory ?
Personally, I'll wait for after earnings to buy cheap 2024/2025 calls.
If my thesis is correct, it will be better in the long term, but tomorrow it will fall after earnings in the short term on weak MAU (Monthly Active Users) numbers (continuing to decline from 10.8 to 10.6 million)
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