As the United States Securities and Exchange Commission (SEC) approved the first spot Bitcoin exchange-traded funds (ETFs) in the United States, Web3 professionals argue that the approvals can boost the dwindling sub-crypto ecosystem of nonfungible tokens (NFTs).
Just in: The SEC approved the Bitcoin ETF!https://t.co/HpebjhDQJ1
— Cointelegraph (@Cointelegraph) January 10, 2024
Bill Qian, the chairman of crypto investment firm Cypher Capital, said that perceived “alternative assets” like NFTs stand to “benefit indirectly” from the approval of the spot Bitcoin (BTC) ETFs in the United States. Qian believes that the approval of the ETFs will also play a pivotal role in mainstream finance’s acceptance of BTC and will likely also affect NFTs.
“The growing understanding and acceptance of Bitcoin will likely spill over, increasing investor curiosity and appetite for NFTs,” Qian explained. He added that expanding knowledge and comfort with digital assets could also lead to a “broader embrace of NFTs” as a viable investment alongside BTC.
Oscar Franklin Tan, the chief financial officer of Atlas Development, a core contributor to the NFT platform Enjin, believes that the spot Bitcoin ETF approvals will “boost NFTs.” The executive argued that “Bitcoin has NFTs,” referring to the Ordinals protocol, which has had over $800 million in sales volume in the last 30 days.
The executive also told Cointelegraph that the ETF approvals are “crucial validation,” showing that the largest digital asset is now SEC-approved for retail. He said:
“No one needs to explain anything. They can just point to the ETF, complete with the big names of BlackRock, Fidelity and Coinbase.”
In addition, Tan said that after the spot Bitcoin ETFs, Ether (ETH) ETFs could be next, bringing a renewed interest in Ethereum-based NFTs. Tan added, “This will bring attention back to the original Ethereum NFTs like Bored Ape Yacht Club and CryptoPunks, which have far more history and established communities than Bitcoin NFTs.”
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Sergey Sheleg, the chief product officer of the Web3 social platform Nicegram, described the integration of traditional financial structures like ETFs with crypto as a positive signal to the NFT market. The executive believes this could improve confidence and increase institutional involvement in the NFT space.
The executive believes that regulations around digital assets are evolving very quickly, and this will “aid the cause of NFTs” that went beyond the initial hype and impacted use cases such as ticketing, fractional art ownership and identity management.
Meanwhile, Dirk Lueth, the co-founder of NFT gaming platform Upland, said that the ETFs will reduce the perceived risk and complexity of entering the crypto market. This will create more comfort in extending purchasing activities in the NFT space.
Lueth believes this will also likely grow with increased market liquidity, the expected reduction of price volatility, better infrastructure and more regulatory clarity. The executive also said that the approvals will raise awareness and confirm that the crypto industry is “here to stay and has a future in the U.S.”
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