The SEC has held the ETF approval for Bitcoin and Cryptocurrency for a couple of reasons. The most significant reason for the same has been the unregulated marketplace. While decentralization in Bitcoin is an attribute that makes it an ideal asset class, the market places or Exchanges that provide for conversion of FIAT to Cryptocurrency is still controlled by independent entities.
A recent report by Bitwise Asset Management published by the SEC inferred that more than 95% of the cryptocurrency volume is being faked. Hence, according to that, the ‘actual spot volume’ on cryptocurrency exchanges is a little above $270 million. Moreover, the reported volume of CME and Cboe Bitcoin Futures is more than one-third of the ‘actual spot volume’ estimated by Bitwise.
According to Bitwise Asset Management,
This is good news because it means CME— a regulated, surveilled market— is of material size, which important for an ETF.
The case of a Bitcoin ETF Approval Now
CME Bitcoin Futures reported a spot trading volume of $85 million. Moreover, according to Bitwise Asset Management, the actual trading volume of the Crypto-to-FIAT Exchanges is around $273 million. Hence, according to this statistic the Futures Trading Volume of CME alone accounted for 31.1% of the ‘Actual Exchange Volume.’
Moreover, there are other Bitcoin Futures market active in Europe and Japan as well. Hence, going by the above statistic, it can be said that the institutional investment might be in parity with the unregulated investment in Bitcoin.
However, the Exchanges have reported total spot volumes total to the tune of $6 billion. This can necessarily raise doubts on its demand being higher than $100 billion. However, it does not directly affect the total market capitalization of a cryptocurrency.
Parity Between Spot Trading of Bitcoin and Gold
The spot trading volume of Gold is 0.55% of its total market capitalization,