00:00On this week's episode of Yahoo Finance Future Focus, we are joined by Alex Pollock,
00:09Head of UK for 21Shares, to discuss the performance of spot Bitcoin ETFs and what it means for
00:15the Bitcoin market if these financial products start trading on the London Stock Exchange.
00:20Alex, welcome to the show.
00:22Brian, thank you for having me.
00:23Thank you.
00:24So, Alex, is the spot Bitcoin ETF narrative now exhausted as a market catalyst?
00:29And if so, are there any other narratives on the horizon that the crypto market could
00:33grasp onto?
00:35So, I would actually say completely the opposite.
00:39I would say that in terms of adoption in the U.S., we're still at the very beginning.
00:45The launch of the U.S. Bitcoin ETFs has been one of the most successful ETFs launches ever.
00:52But a lot of that was just pent-up retail demand.
00:55So, over the first three months of trading, the 11 products that were approved by the
01:02SEC have amassed about $30 billion.
01:07But institutions have not even started yet on their crypto journey.
01:14So, the money that's coming has been predominantly retail money.
01:19Asset managers now who have held back are now thinking about how they can start allocating
01:24to Bitcoin ETFs and how they can allocate within their multi-asset portfolios.
01:30We've also got pension funds, insurance companies, sovereign wealth funds who are starting to
01:34think as well about how they can adopt and invest into crypto and into Bitcoin.
01:38So, I would say completely the opposite.
01:40We haven't actually seen the beginning of – we're still at the very beginning of adoption
01:48into Bitcoin ETFs in the U.S.
01:50Well, on that positive note, we also have the recently approved Hong Kong ETFs.
01:54Now, are we going to see similar uptake there that we've seen in the U.S.?
01:59The launch in Hong Kong was different to the one in the U.S.
02:03So, importantly, the products that were approved in Hong Kong don't allow investors in mainland
02:10China to invest into them.
02:14And there's only certain types of investors in Hong Kong can actually trade them.
02:18Saying that, it still has been a successful launch.
02:21There's another exciting possible approval or likely approval at the end of this month,
02:26and that is the approval of spot Bitcoin exchange-traded notes on the London Stock Exchange.
02:31Yes, this is one I'm very excited about.
02:33What prospect is that going to have for the Bitcoin market, and are we going to see like
02:38a likely mass adoption from institutional traders or retail traders into that?
02:46So, I'm very excited about the launch in the U.K.
02:50I mean, this is something we've been waiting for for a while.
02:53However, we need to kind of temper this because while it does mean we're going to have Bitcoin
03:00and Ethereum ETFs available on London Stock Exchange, they're only going to be available
03:04for professional investors.
03:05So, it's a very different launch to what we saw in the U.S.
03:09One of the questions I get asked a lot is, is this going to be similar to the U.S. launch?
03:14Are we going to see the kind of volumes in the U.K. that we've seen in the U.S.?
03:17I mean, I think that's very unlikely.
03:20What the FCA is trying to do here is they're trying to open up the market in phases.
03:25So, have a listing on the London Stock Exchange that will be used by professional investors.
03:34The game changer in the U.K., though, will be when the retail ban is lifted.
03:38There is a retail ban at the moment, but I think the fact that we will have products
03:42available on the London Stock Exchange does show progress.
03:46And I think that within three years from now, the U.K. will be home to the largest crypto
03:50ETF market in Europe.
03:52And when we think of where crypto or the digital asset realm has come since November 2022 when
04:01the FTX fiasco happened, do you think we still have overhangs from that?
04:05Do you think we're still suffering under the legacy of what happened there with Sandbank
04:09being freed?
04:11I think we do still have some overhang.
04:14I think the U.K. investor, many U.K. investors are still very cynical.
04:19It's still fresh in the mind of many.
04:21But I also think we're moving past that.
04:23And I think exchanges, crypto exchanges, are doing more and more to show that they're responsible,
04:30they want to follow regulation.
04:32We're seeing more done now around proof of reserves.
04:37Crypto is still very, very early.
04:41I've been in this industry for 25 years.
04:45I remember the early days of the ETF industry over 20 years ago.
04:50People very skeptical about how well ETFs would do.
04:53Will ETFs survive?
04:54Will they grow?
04:55You know, here we are 20 years later and ETFs are one of the biggest, most successful trading
05:02instruments on exchanges globally.
05:05Okay.
05:06Alex Pollock, Head of U.K. for 21Shares.
05:08Thanks for coming on EICB Finance Future Focus.
05:10Thanks for having me, Brian.
Comments