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ETFs are likely to see two major catalysts before the end of the year as they open up to more investors on more platforms, according to Bloomberg senior ETF analyst Eric Balchunas.
The first catalyst is providing access to the heart of the advisory world. Balchunas told The Block that, as far as he knows, there is no presence on any significant financial institution platform, which manages between $7 trillion and $10 trillion in assets.
Balchunas added that ETFs will be launched on the platform in the coming months. “It’s like putting a product on the shelf at Whole Foods or a large grocery store. Just that kind of exposure and availability will help,” he said.
In addition to Wirehouse, Balchunas said other large investment platforms such as Raymond James and LPL could help expand access to ETFs. He also noted that many smaller platforms could follow suit.
Creating a product on top of a Bitcoin ETF
Balchunas said the second catalyst was the launch of options trading on Bitcoin ETFs. He estimated that options based on ETFs would be available by September.
“I think these are going to be two huge catalysts. Not to mention the halving, which could cause prices to skyrocket,” he said. “The fact that they did this without any encouragement, without a large platform or without options is a small miracle.”
In addition to options, banks are likely to create structured products around ETFs, as they did with Ark Invest, the analyst said. He added that another product would be the 2X Spot Bitcoin ETF, where swaps would be packaged inside the ETF. He said one or two of these leveraged ETFs could attract significant interest.
He then suggested following a covered call strategy along with instruments such as shorting Bitcoin/gold.
“They will experiment and find some hits. And all of these hits will have an impact on the ecosystem,” Balchunas said. “Obviously there will be all kinds of structures and package deals structured around the core 10 Bitcoin ETFs that we see today.”
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