2024 Game-Changer: Mike Novogratz eyes Bitcoin ETFs as key driver for institutional adoption

2024 Game-Changer: Mike Novogratz eyes Bitcoin ETFs as key driver for institutional adoption

Galaxy Digital’s CEO, Mike Novogratz, is confident that the approval of a Bitcoin spot exchange-traded fund (ETF) is not a question of “if” but “when,” and this development will be the driving force behind institutional adoption in 2024. Novogratz shared his insights during Galaxy Digital’s third-quarter earnings call on November 9, emphasizing the firm’s belief in the imminent approval of Bitcoin and Ether ETFs.

Galaxy Digital, in collaboration with Invesco, submitted spot Bitcoin and Ether ETF applications to the U.S. Securities and Exchange Commission in Q3 2023. The general sentiment among investors has turned bullish, with expectations that the SEC will greenlight 12 major Bitcoin spot ETF applications by January 2024.

According to Novogratz, 2024 is poised to be a year dominated by institutional adoption, primarily driven by the approval of Bitcoin ETFs, which he anticipates will be followed by an Ethereum ETF. As institutional comfort with cryptocurrency grows and government approval solidifies Bitcoin’s legitimacy, Novogratz envisions a broader shift in investment behavior.

He suggests that institutional investment may reach its peak in 2025, especially with increased investments in tokenization and wallets. Novogratz emphasizes the importance of ensuring that dollar-backed stablecoins remain integral to the broader cryptocurrency ecosystem, maintaining the dominance of the U.S. dollar.

The approval of a Bitcoin ETF, according to Novogratz, will instill institutional confidence and inject significant capital into the cryptocurrency space, creating an environment for other projects to flourish. He sees the ETF as a catalyst, providing breathing space and invigorating the ecosystem.

During the investor call, the potential impact of an Ether spot ETF was also discussed. Novogratz highlighted that its approval might not be as enthusiastically received as a Bitcoin ETF due to the differences in Ethereum’s validating model, which is based on staking. The technical nuances, especially regarding staking rewards, could make an Ether ETF less appealing compared to direct ownership and staking.

Novogratz stressed the importance of utility in blockchain projects, asserting that they must serve a purpose and have tangible applications built on them to sustain long-term value. He concludes that the crypto space is on target for its long-term plan, and the forthcoming developments, especially ETF approvals, will play a pivotal role in shaping the industry’s trajectory.

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