Institutional investors are increasingly bullish on BTC and are willing to allocate a larger portion of their investment portfolios to crypto assets.
Source: Bitcoinist
Translation: Blockchain Knight
For a long time, the SEC (U.S. Securities and Exchange Commission) has been a stumbling block for the approval of spot BTC ETFs. However, recent data shows that this situation is changing, especially among Wall Street investors.
On January 3, Marty Party observed on X that an increasing number of traditional funds that typically invest in securities are now amending their prospectuses to allocate 15% of their assets under management (AUM) to BTC.
This move is significant for the BTC and broader crypto asset markets. It indicates that institutional investors are increasingly bullish on BTC and are willing to allocate a larger portion of their investment portfolios to crypto assets.
From a regulatory perspective, this may also indicate pressure on the SEC to approve spot BTC ETFs.
As mutual funds are willing to adjust their prospectuses and allocate funds, it suggests a demand for BTC (and possibly other crypto asset derivatives) among financially strong institutional investors.
Party cited SEC data indicating that several funds have amended their prospectuses to allocate 15% of their assets under management to BTC.
Advisors Preferred Trust notified regulators in a filing that it can now hold up to 15% of spot BTC assets through Grayscale.
Arca Asset Management Trust Fund also plans to allocate 50% of its assets under management to Grayscale, ProShares BTC ETF strategy, and futures contracts.
Nevertheless, the SEC has been reluctant to approve spot BTC ETFs, citing concerns about market manipulation and investor protection.
However, the growing interest from institutional investors and political figures may force the SEC to reconsider its position. Regulatory agencies may approve the first spot BTC ETF in January 2023.
This approval would be a significant victory for crypto assets and BTC, potentially opening the market to more investors. Subsequently, this decision would also contribute to legitimizing BTC as a mainstream asset class.
Until then, the trend of institutional investors allocating more funds to BTC is likely to continue. However, the reaction of BTC prices will be closely monitored in the coming weeks.
Earlier on January 3, BTC prices plummeted after reports suggested that the SEC might not approve any spot BTC ETFs in January. Some analysts also attributed the flash crash to the rise in funding rates, which have recently reached multi-month highs.
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