While 2024 still has a few months to go, it is proving to be one of the most game-changing years in the history of cryptocurrency. In the short time since the release of the white paper in 2009, the industry's quest to become a real player in the wider financial landscape has often been met with raised eyebrows and ridicule from those in traditional circles.

Early on, this was understandable; it was challenging to get your hands on cryptocurrency, and its failure to gain the acceptance of the broader financial community meant that it struggled to find a narrative that could truly highlight the innovation that exists within the space. All of this is a thing of the past now, as cryptocurrency is on the cusp of becoming widely accepted and adopted across many key industries.

So, how big is the role that ETFs have played in legitimizing the industry, and could they prove to be the vehicle, and indeed the ticket, that takes the sector across the finish line and amongst some of the other market-leading global commodity markets?

Providing A Springboard For Widescale Use

Exchange Traded Funds (ETFs) provide a tangible financial product that helps wealthy investors put their money into cryptocurrency assets. Asset management companies like BlackRock have been able to launch their ETFs in the USA, with the approval of the SEC, and give investors a financial vehicle whereby they can invest in Bitcoin without any direct exposure to the asset.

Instead of opening an account themselves and buying and selling the product, an ETF allows investors to invest through an asset management company, and they invest in the asset directly. A lot of ignorance keeps people away from cryptocurrency, so the emergence of the world’s largest asset management firm has done wonders for Bitcoin.

Other projects have contributed to helping to bridge the gap and focus on the convenience that blockchain can offer. Everyday Bitcoin use includes transacting with merchants online or playing a casino game, two of the most common ways people are introduced to how cryptocurrency and the blockchain operate.

Crypto casinos have been one of the strongest use cases in this regard. Thunderpick is one casino platform that picked up on this trend early. It now provides a broad range of casino games for users who want to place their wagers with digital assets rather than traditional currencies. Users need to be able to see how cryptocurrency works in real-time for quickfire casino transactions rather than traditional investment instruments that not everybody uses.

Crunching The Numbers

There’s no disputing that the SEC finally allowing Bitcoin ETFs in January 2024 was one of the key reasons Bitcoin achieved a new all-time high this year, albeit briefly. More importantly, ETFs mark a key turning point in the road and lifespan of cryptocurrency - no longer the big players in the industry, eccentric billionaires on social media, or well-meaning but primitive crypto-asset management companies who are still navigating a new market.

Yes, there’s been a phenomenal rise in the capital, and the interest that has come with this has led to this positive price action, but the legitimacy that comes with names like BlackRock is evident in the data. As of May 2024, just a few months after the launch of their initial ETF - the BlackRock Bitcoin trust became the largest in the world.

While the ETF has definitely helped cryptocurrency regain its footing in the global financial market, several other factors have positively impacted the visibility of digital assets in the wider investment world and helped inject more money into the collective crypto market.

Airdrops are one of the narratives that have helped inject billions of dollars of capital into the market. While airdrop farming might be getting a lot of attention at the moment, it’s those who farmed protocols last year during the market downturn that have been rewarded for their persistence and diligence pre-ETF when the market was moving a lot slower.

Final Thoughts

It’s clear that there’s a huge appetite for Bitcoin. The emergence of the ETF alleviates the wealthy's initial reluctance to stick to investments in traditional circles. There’s no disputing that the approval of ETFs in the world’s most prominent economy is one of the most important landmarks in the asset's history. Some believe it is the most notable blockchain and crypto-related development of the 2020s thus far.

While it’s still early days in relation to ETFs, we will be able to discern over the next 12 to 18 months whether or not they were the missing piece in the puzzle and have resulted in widespread cryptocurrency adoption. If they aren’t the missing piece, they have played at least a key role in closing the gap between traditional “old” money and the new digital asset world we appear to be creeping close toward with each passing year.

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