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ETFs are likely to see two major catalysts before the end of the year as they get opened up to more investors on more platforms, according to Bloomberg Senior ETF Analyst Eric Balchunas.
The first catalyst involves making them accessible to the core of the advisory world. Balchunas told The Block that, as far as he’s aware, they are not present on any significant wirehouse platforms, which he identified as looking after between $7 trillion and $10 trillion in assets.
Balchunas added the ETFs should land on those platforms within the next few months. “It’s like putting a product on the shelf of Whole Foods or a big food store. Just that kind of exposure and availability is only going to help,” he said.
Balchunas said that in addition to wirehouses, other large investment platforms like Raymond James and LPL could help expand access to ETFs. He also noted that many smaller platforms could follow suit.
Creating products on top of the bitcoin ETFs
Balchunas said the second catalyst would be launching options trading for bitcoin ETFs. He estimated that options based on the ETFs will be available by September.
“Those are two massive catalysts I think are still to come. Not to mention the halvening, which could result in a price jump,” he said. “The fact that they’ve done this well, without solicitation, without the big platforms, without options is a minor miracle.”
Beyond options, the analyst said, banks will likely make structured products around the ETFs, as they did with Ark Invest. He added that another instrument will be 2X spot bitcoin ETFs, where swaps are packaged inside the ETFs. He said one or two of these leveraged ETFs will likely gain much traction.
After this, he suggested that covered call strategies would follow, alongside products such as long bitcoin/short gold.
“They’re gonna experiment and they will find a few hits. And these hits will all feed on the ecosystem,” Balchunas said. “For sure there will be all kinds of structures and package trades that formulate around the sort of core ten Bitcoin ETFs that we see today.”
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