Wall Street backs crypto in bitcoin ETF push

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Wall Street players are now backing crypto as institutional investors show support for bitcoin ETFs. Yahoo Finance crypto reporter David Hollerith checks Bitcoin’s year-to-date performance and Bitcoin ETF approval prospects.

Video transcript

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AKIKO FUJITA: Crypto prices were down today, but momentum has been strong this year. And now some of the biggest names in finance are making new bets on cryptocurrencies, adding competition and momentum to the space. David Hollerith of Yahoo Finance has more to say about this story. And David, nothing like a boost in confidence from Wall Street to get investors bullish on crypto again.

DAVID HOLLERITH: Akiko, the movements of the big players in finance that we’ve seen over the past two weeks obviously started with the filing of an ETF by BlackRock. We also saw the ETX markets start trading. And they’re backed by Fidelity Charles Schwab and Citadel Securities. And it is a new crypto exchange that does not interact with individuals but is more like a traditional exchange.

And then we have Deutsche Bank which also applies to custody of crypto assets. And outside of BlackRock, many of these moves were already telegraphed a year ago. But obviously it’s come at a really good time I guess you’d say for space just given that a lot of this year so far the story has been the application of regulations to United States leading to prosecution. And that’s still a big part of what we’re looking at to figure out where things are going.

Regulation, of course, in the United States is a very big problem. But we obviously saw that Bitcoin price went up a lot and then the total crypto market capitalization followed. And we have seen even higher inflows into exchange-traded products associated with Bitcoin. So there’s a lot of excitement about it. Most of these have actually been reported previously, but I think this highlights – it’s a reminder that cryptocurrency hasn’t disappeared as much as it sometimes seems.

And we see earlier this month, in fact, the SEC filing charges against the two largest crypto exchanges in the world.

The story continues

AKIKO FUJITA: And David, up to this point, at least up to this point, considering the massive uptick we’ve seen in the price of Bitcoin, which is up about 80% since the beginning of the year. It hasn’t had a massive impact yet, but I guess you can tell it’s going down to a very depressed level after the FTX implosion. But what do you think are the key things investors need to watch out for when trying to figure out where Bitcoin, where crypto is heading in the second half?

DAVID HOLLERITH: Yes. Always a good question. I think it’s fair to think of it this way, that regulation has really dominated the prices of cryptocurrency assets. Perhaps Bitcoin the least, but Bitcoin still faltered on bad regulatory news. Regulation will therefore remain a major objective. But as things clear up, at least I think with the announcements from BlackRock and ETX, there’s a signal that American companies or financial institutions, should I say, are still interested in s involve in the space.

And I think that takes some of that away. That being said, from what I’ve heard from crypto hopefuls in Washington, it looks like two bills are gearing up for a vote in the House in July. And I heard with optimism that one of these two bills could pass the House by the end of the year. There is much less optimism about what might happen in the Senate.

And then that being said, the most important lawsuit when it comes to the ETF is the grayscale lawsuit. Grayscale is suing the SEC for failing to approve its spot Bitcoin ETF or for approving a conversion of its existing product. So the verdict for this case will be in early September, and that’s going to be really important. And we don’t have the exact information, we don’t know, but it would be hard to imagine that the SEC would even consider approving an ETF before that verdict was made.

AKIKO FUJITA: I know you will be following these developments closely, David Hollerith, thank you.

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