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Wall Street’s growing appetite for cryptocurrencies has undoubtedly injected fresh momentum into the digital asset market. However, the influx of traditional finance giants may not be entirely benign, according to Tether co-founder William Quigley. While the increased liquidity and institutional backing can bolster market stability and confidence, Quigley cautions that it could also introduce a new set of risks and challenges.
Wall Street’s growing appetite for cryptocurrencies has undoubtedly injected fresh momentum into the digital asset market. However, the influx of traditional finance giants may not be entirely benign, according to Tether co-founder William Quigley. While the increased liquidity and institutional backing can bolster market stability and confidence, Quigley cautioned that it could also introduce a new set of risks and challenges.
Quigley predicted that the market would witness a wave of new ETF launches until a significant pullback occurred, after which some of these ETFs would likely be shut down due to waning demand.
The SEC’s long-awaited approval of spot Bitcoin ETFs in the U.S. in January marked a significant milestone in integrating cryptocurrencies into mainstream financial markets. By allowing investors to gain exposure to Bitcoin without directly holding the cryptocurrency, ETFs provided a more accessible and regulated investment vehicle. This approval sparked significant interest and investment inflows, highlighting the growing acceptance and institutional interest in digital assets. The success of the Bitcoin ETF paved the way for further crypto-related financial products, with Ethereum ETFs generating particular anticipation.
While regulatory authorities gave initial approval to Ethereum ETFs in late May, trading would not commence until the funds’ S-1 registration forms were approved. SEC Chairman Gary Gensler indicated that the approval process for Ethereum ETFs might be completed by the end of the summer.
Despite the increased mainstream attention brought by ETFs, Quigley expressed dissatisfaction with Wall Street’s growing involvement in the crypto space, stating that he preferred the cryptocurrency market without their influence. He warned that aggressive marketing of crypto products by Wall Street could lead to significant risks, particularly if institutional investors withdrew during market downturns. However, Quigley acknowledged the necessity of a significant capital influx for substantial market growth and conceded that ETFs were essential for attracting such capital.
While Bitcoin reached a new all-time high price above $73,700 in March, partially attributed to ETF hype and anticipation for the quadrennial halving event, it has yet to seriously challenge that mark again in the months since. Despite Bitcoin’s current price of just under $67,000, Quigley expressed confidence in the historical pattern of price increases following a halving event, predicting a significant price increase in the future.
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