And after ? This is the question that has animated the world of crypto since the end of the trial of Sam Bankman-Fried, known as SBF. The former leader of the cryptocurrency exchange platform FTX, ex-star darling and friend of politicians of all stripes, was found guilty of fraud, criminal conspiracy and money laundering in early November in UNITED STATES. In bankruptcy, his company leaves a gaping hole of eight billion dollars, shaking in the process the (meager) confidence acquired in this ecosystem.
The sector’s new hope is still contained in three letters: ETF. This time, this shortcut does not designate any atypical boss or yet another dubious start-up. An ETF (Exchange-traded fund, in VO) is a fund listed on the stock exchange, with low fees. An instrument for traders, born around thirty years ago and whose popularity has grown considerably since then. From just 276 ETFs in 2003, today there are nearly 9,000, in which trillions of dollars circulate. Its operation is very basic: an ETF replicates the performance of a stock market index, its rise or fall, without having to buy each of the values composing it. The best known is that offered by the management company Vanguard, indexed to the S&P 500, itself based on the results of the 500 largest American companies.
Several prestigious asset managers such as Greyscale, Fidelity, Invesco, and especially BlackRock now wish to “sponsor” an ETF replicating the price of bitcoin, the queen of cryptocurrencies which gives the “the” to the market. After a long plunge below $20,000, attributable to the FTX and Terra-Luna scandals, as well as the deterioration of the global economic context, it is currently recovering, reaching $38,000 per unit. The possible arrival of an ETF seems to have a lot to do with this rebound. A message from the specialized media CoinTelegraph, in mid-October, mistakenly announcing on Another takeoff took place when analysts from Bloomberg estimated a 90% chance of seeing a bitcoin “spot” ETF materialize by January in the United States.
Why this excitement? “An ETF is a very simple, accessible product, which fits into an investment portfolio and allows it to be easily diversified,” explains Nathalie Janson, doctor in economics and associate professor in the Finance department at Neoma Business School. Particularly for institutional investors, until now rather cautious about the idea of handling volatile bitcoin, on platforms that are not always secure, such as FTX. “An ETF is regulated and secure,” specifies Antoine Andreani, analyst at the broker XTB France. And if, in Europe, bitcoin ETFs already exist, “it is indeed the legitimacy and the power of an actor like BlackRock”, the largest manager on the planet with nearly 9,500 billion dollars in its hands, which leaves this time hope for great success, adds the expert. Speculation is rife in the community. Will bitcoin subsequently return to its record from November 2021, at $69,000? Is it capable of surpassing the symbolic mark of $100,000, long promised to this “digital gold”?
In reality, no one knows how the market might behave if an ETF is approved. “The introduction of bitcoin futures (future), in December 2017, at the time highly anticipated by the industry, marked the start of a collapse in prices of more than 70% in a few days”, recalls Antoine Andreani. Whatever happens, this new ETF would however have the merit of making bitcoin more “liquid”, wants to believe Nathalie Janson. By boosting exchanges, it would gradually become less expensive, less volatile, and therefore more attractive, both for the financial spheres but also individuals .
The only major pitfall lies in yet another three-letter acronym: the SEC. The policeman of the American financial markets, led by Gary Gensler, very critical of this sector, is currently resisting and has not given in to any request for an ETF dedicated to the queen of cryptos. This green light, despite the optimism of Bloomberg, might never come. The bank JP Morgan, in an analysis published at the end of last week, considers it “unlikely that the SEC will soften its positions” for the moment. In question, the numerous disputes between the two camps. The American agency is currently battling with the giant Binance in court, and is also putting pressure on various stablecoin issuers. Perhaps now is not the time for crypto giveaways. Especially since the FTX affair is still smoking and its clients are bloodless. Even Sam Bankman-Fried does not know the exact quantum of his sentence.