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Mike Novogratz Predicts a Bitcoin ETF War Between Invesco, BlackRock, and Fidelity

Ruholamin Haqshanas
Last updated: | 2 min read
Source: LinkedIn

The recent regulatory approval of 11 Bitcoin (BTC) spot exchange-traded funds (ETFs) has set the stage for an intense battle among asset management firms.

Renowned crypto enthusiast Mike Novogratz, who is CEO of Galaxy Digital, has forecasted a fierce struggle for dominance between Invesco, BlackRock, and Fidelity.

Speaking with CNBC, Novogratz emphasized that the cryptocurrency ETF landscape is not one-size-fits-all.

He explained that winning the war in this emerging market hinges on factors such as execution, liquidity, and hidden fees, rather than merely reducing expense ratios.

Mike Novogratz’s firm has even partnered with Invesco to launch its own cryptocurrency ETF, giving him firsthand experience in the field.

“The regulatory approval of these 11 bitcoin spot ETFs this week set Wall Street on a chase for customers, with two to three management firms likely to win out in the long run,” said Novogratz, highlighting the intense competition that has already begun in the race to attract investors.

Invesco, BlackRock, and Fidelity to Capture Significant Share of Market

While he refrained from making specific predictions about the ultimate victors, Novogratz believes that Invesco, BlackRock, and Fidelity will be the key contenders in this crypto showdown.

These industry giants are positioning themselves to capture a significant share of the growing market. Furthermore, Novogratz’s bullish outlook on Bitcoin remains unwavering.

He anticipates further appreciation in the cryptocurrency’s value, driven by the ongoing tightening of its supply.

Many long-term Bitcoin holders are reluctant to sell their holdings, leading to decreased available supply and potential price surges.

Novogratz’s sentiment aligns with the view that Bitcoin’s unique asset-holding culture distinguishes it from traditional assets.

Additionally, factors like the upcoming halving cycle are expected to accelerate the supply shortage, further driving Bitcoin prices upward.

However, the seasoned crypto enthusiast also sounded a note of caution.

He suggested that while Bitcoin’s rise may be seen as a safe-haven asset amidst global economic uncertainty, it is, in part, a response to governments injecting excessive amounts of money into their economies and accumulating debt.

Novogratz pointed out that this trend could potentially signal broader economic challenges.

SEC Commissionare Voices Concern Regarding Bitcoin ETFs

SEC Commissioner Mark Uyeda, while voting in favor of these landmark approvals, has publicly voiced reservations regarding the decision-making process adopted by the commission.

Commissioner Uyeda, a pivotal figure in the approval process, acknowledged his support for the Bitcoin ETF applications.

Yet, he has raised concerns about the analytical methodology the SEC employed to arrive at its conclusion.

“The flawed reasoning in the [spot Bitcoin ETF] Approval Order could reverberate for years to come,” he wrote.

His apprehensions stem from what he perceives as a missed opportunity by the SEC to treat Bitcoin akin to other commodities.

Delving deeper into his criticism, Uyeda pointed out that the commission has historically distinguished Bitcoin ETFs through an unprecedented ‘significant size’ test – a standard that, according to him, the Bitcoin ETFs should have passed long ago.

This approach, he argued, contrasts sharply with how Bitcoin futures ETPs (Exchange-Traded Products) have been treated under the same test.