Survey Reveals Huge Demand For Crypto Spot ETFs By US Financial Advisors

US Congressmen Lobby SEC Chairman Gary Gensler To Authorize A Spot Bitcoin ETF
  • Nasdaq survey shows US financial advisors want a spot crypto ETF product.
  • Advisors also have no plans on reducing their exposure and are willing to get broader exposure under an index fund.
  • Factors are pointing at a spot ETF green light coming soon.

A recent Nasdaq survey published Monday shows a high demand for spot ETFS among financial advisors, revealing that adopters had no plan to reduce their crypto allocation. Advisors remain skeptical that a spot product will be approved this year despite the demand.

Advisors Uncertain Of A Spot ETF Approval This Year

According to a Nasdaq Survey of 500 financial advisors published on Monday, 72% of financial advisors would more readily advise clients to invest in crypto if a spot ETF product was approved in the US. Sadly, the Gary Gensler-led SEC continues to reject spot ETF applications from various institutions.

The SEC in its responses, has said that applicants have failed to meet requirements to ensure consumer protection and protect against market manipulation. As reported by ZyCrypto, Ark 21Shares, was the latest to face rejection at the hands of the SEC. For now, the crypto community will have to wait till July, when the SEC is set to decide on applications from Grayscale and Bitwise.

When asked if they expected a crypto spot ETF product would gain approval from the SEC this year, a majority of the financial advisors expressed varying uncertainty. According to the report, 38% think it could happen, 31% do not see it happening, 24% find it neither likely nor unlikely, and 7% are unsure.

Aside from a huge demand for crypto spot ETF products, the survey also showed that the demand for crypto exposure would not wane anytime soon. The report reveals that 86% of advisors already invested in the developing market plan to increase their holdings in the coming year. None of those currently invested have plans to reduce their allocations.

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As per the report, 50% are already invested in Bitcoin Futures, the only crypto ETF product the SEC has given the green light. The survey also indicated that the financial advisors were willing to get broader exposure to the nascent market if an index fund could get approval from the SEC.

The Outlook On Spot ETFs

As stated previously, the SEC has refused to budge so far on spot BTC ETF applications. However, as ZyCrypto reported, we might be seeing spot ETF approvals soon with an expected SEC rule change.

According to Bloomberg Intelligence analyst James Seyffart, a revision in the SEC’s definition of an “exchange” could finally turn the tide in favor of spot ETF products. Seyffart sees spot ETF approvals in the first or second quarter of 2023.

However, the rule change is not the only indicator of a spot ETF nod coming soon. The SEC’s approval of Teucrium’s futures ETF has also increased speculation that a spot ETF might be on the horizon, as the futures ETF received approval under the 1933 Securities Act, which follows the same process that many spot ETFs fall into. The SEC previously had remained adamant about sticking to the Investment Company Act of 1940.