Mathew McDermott, head of digital assets at Goldman Sachs, says that a spot Bitcoin (BTC) and Ethereum (ETH) ETF (Exchange Traded Fund) will increase institutional interest in cryptocurrencies.
While speaking to Fox Business, McDermott stated, “One, it broadens and deepens the liquidity in the market. And why does it do that? It does that because you’re creating institutional products that can be traded by institutions that don’t need to touch the bare assets.“
However, McDermott does not anticipate a sudden transformation with a spot ETF approval. Instead, the Goldman Sachs exec expects a gradual shift in the landscape over the next year.
Moreover, McDermott says that the increasing acceptance of cryptocurrencies will decrease risks. He added, “It can have a lot of very positive impacts in terms of business model.“
How high can Bitcoin go if a spot ETF is approved?
Investors have long pursued a spot BTC ETF in the US. After years of waiting, crypto users and investors may finally have their prayers answered. According to a Bloomberg analysis, there is a 90% chance that the US SEC (Securities and Exchange Commission) will approve one or more spot BTC ETFs in early January 2024. Other analysts, such as Anthony Scaramucci, have also said the likelihood of an approval in January is very high.
If the SEC approves one or more Bitcoin (BTC) ETF applications, the price of BTC may surge to new highs. Billionaire venture capitalist Tim Draper predicted that BTC could hit $250,000 in 2024.
However, there is also a possibility that the spot BTC ETF approval turns out to be a “sell the news” event, which does not move the asset’s price. However, even in such a situation, the long-term aspects of Bitcoin (BTC) are very bright. It will lead to fewer risks and more funding from financial institutions, which could still cause the asset’s price to eventually rise.