Crypto Enthusiasm Matures at Exchange ETF Conference

In 2022, the Exchange ETF conference was marked by a significant presence of crypto-related discussions and announcements. Tech entrepreneur Pippa Malmgren kicked off the event by highlighting the revolutionary potential of Bored Ape Yacht Club NFTs in the financial sector. Michael Saylor interpreted a speech by the US Treasury Secretary as bullish for digital assets, while Fidelity announced the launch dates for its crypto industry and metaverse ETFs. Grayscale's then-CEO, Michael Sonnenshein, indicated that the firm might sue the SEC if its proposal to convert GBTC to an ETF was rejected. This period saw crypto as a novel and exciting development within the traditional finance (TradFi) ecosystem.

Following the conference, the SEC declined Grayscale's bid, leading to a lawsuit from the asset manager. This legal battle eventually resulted in the approval of US spot BTC funds in January 2024, significantly boosting the crypto vibes at the Exchange 2024 event. The atmosphere was one of post-ETF launch euphoria, with a strong presence of crypto-related discussions and exhibits.

This year, the crypto presence at the Exchange ETF conference remained evident, though with a more subdued tone. The main expo hall featured an F1 racecar in front of Kraken subsidiary CF Benchmarks’ booth, and various firms, including Franklin Templeton and VanEck, distributed promotional items related to their crypto ETFs. Grayscale's table showcased hardcover books detailing bitcoin’s investment case and FAQs. Despite the visible crypto presence, the hype was noticeably less intense compared to the previous year, as other topics like private credit and ETF share classes gained more attention. Some attendees suggested that this tempered enthusiasm indicated the maturing of crypto as a mainstream investment segment.

TMX VettaFi’s Cinthia Murphy noted that crypto is now a part of everyone’s conversation, with rapid product development in the sector. The event highlighted various crypto-related filings and plans, including single-asset spot crypto ETF proposals and the expansion of existing crypto index funds to include assets beyond BTC and ETH. Discussions with firms like Calamos and Innovator focused on funds offering bitcoin exposure with downside protection. ProShares, known for its bitcoin futures ETF, also had a presence, with Investment Strategist Simeon Hyman hinting at upcoming innovative products.

State Street Global Advisors, which introduced actively managed digital asset portfolios with Galaxy in September, urged advisers to explore beyond traditional 60/40 portfolios, including alternatives and crypto. Charles Schwab reiterated its close monitoring of the regulatory environment and plans to offer spot crypto trading once regulations change, while Vanguard maintained its stance that crypto does not belong in a well-balanced, long-term portfolio. JPMorgan Asset Management, on the other hand, stated that it has no plans to offer crypto ETFs.

During a panel discussion, a majority of attendees expressed optimism about bitcoin's future, with a clear majority predicting that BTC would hit $150,000 rather than $50,000. Nearly everyone in the room took a bullish stance on bitcoin's long-term prospects, with only a few skeptics expressing concern about its potential to drop to near-zero value. This optimism reflects the ongoing enthusiasm and belief in the potential of crypto within the investment community, despite the more subdued atmosphere at the conference.