The SEC might finally approve spot bitcoin ETFs on Wednesday after denying applications for more than a decade.
Valkyrie co-founder and CIO Steven McClurg expects $10 billion or more to enter spot bitcoin ETFs by the end of the year, with around $2 billion to $3 billion in the first anticipated week of trading. “This doesn’t account for market moves alone,” he said. “This is just new inflows that I expect. Counting market movements, it could be $20 billion total AUM in spot bitcoin ETFs.” Valkyrie is one of 11 applicants for a U.S. spot bitcoin ETF; the other firms are BlackRock, Grayscale and Fidelity, among others.
He also thinks bitcoin’s price will hit $150,000 or higher before 2024 ends. “As far as price, I think there will be a supply shock that moves [the] price forward,” McClurg said. “The ETF creates a lack of supply, so buying activity. After the halving, I expect us to go back into a bull cycle and from a macroeconomic perspective I do think the Fed is going to lower rates again in May/June ahead of the election which will cause risk excess to go up.”
We sat down with McClurg to chat about impending demand for spot bitcoin ETFs, why he thinks futures bitcoin ETFs will go away, which spot crypto ETFs could come next, and why the fee wars are “ridiculous.”
The following interview has been edited for length and clarity.
When did you know that the SEC might actually approve a spot bitcoin ETF?
We’ve been running hard for the last probably six weeks now on this, and it’s been quite exciting. But it was back in the end of September, beginning of October, when we’re launching our ETH futures ETF. Right when we were getting ready to launch, we received comments from the SEC on our spot bitcoin application, and we thought, “Well that came out of nowhere.” And once we got those comments, we realized that OK, they’re taking a look at it now. They wanted to get these future products behind them, and now let’s focus on this.
So myself and others are very confident that Wednesday it’ll get approved aftermarket with a Thursday launch to trade.
How did the launch of your futures ETH ETF product in September go?
So what we did was a little bit different. When we got an inclination that [the] spot bitcoin ETF was coming soon, we said OK, well, bitcoin futures ETFs are basically going to go away when a spot bitcoin ETF launches.
So we converted our bitcoin futures ETF into a strategy to invest in both ETH and bitcoin. That’s actively managed so that way we can kind of tie the market on those two asset classes, which is actually the easiest to do in futures. And even if there was an ETH spot available, then we could do a bitcoin ETF.