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A Deep Dive into Bitcoin ETFs and its Impact on the Financial Market – A Conversation with Cryptoast




In this episode of the Cryptoast podcast, Lilian Aliaga welcomes Cyril Sabagh, our Managing Director at Melanion Capital, for an in-depth discussion on the Bitcoin Spot ETF in the United States. At the time of this interview, the approval of this ETF by the SEC had not yet been completed, but the conversation focuses on the long-term implications of this financial innovation. Cyril brings his unique expertise to explore the dynamics and challenges of this major development in the world of cryptocurrencies.

Melanion and the First Bitcoin ETF Equities in Europe

Cyril introduces Melanion Capital, a pioneer in the creation of the first Bitcoin Equities ETF in Europe. This product offers regulated exposure to Bitcoin through equities without directly investing in the cryptocurrency, skillfully navigating a complex regulatory landscape. He emphasizes the importance of diversifying investments, particularly by including stocks of companies related to the Bitcoin ecosystem.

Context of Bitcoin Spot ETFs in the USA

The discussion turns to the history of Bitcoin ETFs in the United States. The first applications date back to 2013 but have often been rejected by the SEC, mainly due to concerns about potential market manipulation. However, the year 2023 marked a turning point, with major players like BlackRock getting involved in the Bitcoin ETF race.

The Importance of a Bitcoin ETF

A Bitcoin Spot ETF would allow a more direct and pure investment in Bitcoin compared to existing products based on futures. Cyril explains how ETFs on derivative products, although efficient, do not offer the same purity of exposure as Spot ETFs. The discussion also raises the potential for market manipulation and the regulatory complexity associated with Bitcoin ETFs.

The Impact of the ETF on the BTC Price

The potential impact of a Bitcoin Spot ETF recognized as a “thematic ETF” focusing on cryptocurrency, on the BTC price is discussed. Cyril believes that the introduction of this ETF in the United States could lead to a significant increase in the price of Bitcoin, mainly due to the anticipated strong demand.

Risks and Centralization Around Bitcoin

The conversation delves into concerns about centralization and market control by entities like BlackRock. Cyril acknowledges these concerns but also highlights the importance of education and diversification in the process of adopting Bitcoin evolution.

The Growing Demand for Bitcoin ETFs in Europe

In Europe, the demand for investment products related to Bitcoin is increasing, although the evolution is slower compared to the United States. Cyril sheds light on the different investment dynamics between the two continents.

This exchange between Cyril and Lilian offers a detailed and balanced perspective on the evolution of Bitcoin ETFs, their potential implications on the financial market, and the upcoming regulatory and structural challenges. This in-depth discussion reveals the complexities and unique opportunities that Bitcoin ETFs represent in the global financial landscape.

Our latest research output: A Bitcoin Equities ETF

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