Investors have been waiting a decade for a spot Bitcoin ETF—and now it looks like one might be just around the corner.

The price of Bitcoin jumped Monday after talk that the world’s biggest asset manager, BlackRock, was closer to getting approval from the U.S. Securities and Exchange Commission on its Bitcoin ETF application.

Analysts and experts in the space have said a crypto ETF (exchange-traded fund) will probably hit the market in January—or maybe even sooner.

It’s still far from a certainty, and the SEC has in the past been reluctant to approve the long-awaited product. An ETF would track the price of Bitcoin, allowing investors to get exposure via buying shares and not dealing with digital wallets, exchanges, or private keys. Because an ETF would remove the technical hurdles, some analysts and Bitcoin preachers have said that such a fund could lead to an influx of capital into the Bitcoin market.

But will a Bitcoin ETF live up to the hype?

Not everyone thinks so. J.P. Morgan researchers pointed out back in July that spot crypto exchange-traded products in Canada and Europe haven’t yet moved markets with large investor interest.

Bloomberg Intelligence analyst Eric Balchunas told Decrypt that there “might be a bit of a gap between the hype and the actual demand early on,” adding that when a Bitcoin ETF finally does start trading on a stock exchange, it might not do as well as when the first futures crypto ETF kicked off two years ago—and broke records.

A futures crypto ETF differs from a spot market ETF in that investors buy shares that offer exposure to contacts that bet on the future price of crypto—rather than the asset itself. The SEC greenlit the futures product at the height of the bull market despite denying spot market applications for years.

“I wouldn’t be surprised [if a spot market Bitcoin ETF] way underperforms flow-wise BITO [ProShares Bitcoin Strategy ETF] because BITO was launched at the peak of the mania,” he said. “I’m preparing for something that’s much more mild than BITO but I want to think in three years, five years, it’ll be pretty successful.”

BlackRock Bitcoin ETF Is the ‘Real Deal’—Is This Finally the One?

BITO started trading in October 2021, when Bitcoin was selling for $64,000 per coin. Back then, there was a huge appetite for everything crypto—the product traded $280 million-worth of shares in just the first 20 minutes.

By the time the market closed on day one, nearly $1 billion in shares had changed hands.

But since then, the price of every digital asset has plummeted and the industry has been plagued by bankruptcies, hacks, and scams, which could scare away would-be Bitcoin ETF investors—especially those who already have racked up losses.

Ethereum futures ETFs launched earlier this month to a slow start. “A lot has happened, a lot of baggage has set in—even though Bitcoin came back this year—I think that it’ll be somewhat subdued,” added Balchunas.

Adam Guren, co-founder of crypto hedge fund Hunting Hill Digital, said that liquidity constraints in today’s exchanges compared to 2021 are something to consider, too, pointing out that analysts have said “even attaining $500 million in day-one inflows as a noteworthy challenge.”

And the SEC currently has a long-list of Bitcoin ETF applications to approve. There has been speculation that they all might get the green light at the same time, which would lead to a disperse of interest, experts told Decrypt.

But one thing that experts agreed with was that in the long-term, the approval of such a product would be good for Bitcoin.

Bloomberg Intelligence analyst James Seyyfart told Decrypt that “more and more investors are going to be interested in a spot product than they would be in a futures product.”

“If you’re looking at this over the year timeframe, I think that will show that the spot ETFs will have more demand in the futures ETFs,” he said.

Guren added that a spot Bitcoin ETF approval would represent a “momentous milestone,” paving the way for “a more favorable environment for cryptocurrency investments in the United States.”

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