Bitcoin ETFs will drive institutional adoption in 2024 — Galaxy Digital’s Mike Novogratz

Galaxy Digital founder Mike Novogratz has told investors that 2024 will be headlined by institutional adoption of cryptocurrencies, which will be driven by the pending approval of Bitcoin (BTC) spot exchange-traded funds (ETFs).

During Galaxy Digital’s third-quarter earnings call on Nov. 9, Novogratz highlighted the firm’s belief that approving several ETFs “is now not a matter of if but when.” The fund manager filed its spot Bitcoin and Ether (ETH) ETF applications with the United States Securities and Exchange Commission in partnership with Invesco in Q3 2023.

Investors’ sentiment has turned bullish in November 2023, with prominent ETF research analysts predicting the SEC will have approved 12 major Bitcoin spot ETF applications by January 2024.

“2024 literally is going to be a year of institutional adoption, primarily first through the Bitcoin ETF, which will be followed by an Ethereum ETF,” Novogratz said during the Q3 earnings call.

“As institutions get more comfortable, if the government gives its seal of approval that Bitcoin is a thing, you are going to see the rest of allocators starting to look at things outside of that. And so, money will flow into the space.”

Novogratz added that institutional investment could come to a head in 2025 as investments “in tokenization and wallets” ramp up. The Galaxy Digital CEO added that a key focus for the U.S. landscape should be ensuring that dollar-backed stablecoins remain a central cog in the wider cryptocurrency ecosystem.

“We are going to continue to be dollar-dominant. We better have a dollar-backed stablecoin that reflects our values and is taken up around the world.”

According to Novogratz, a Bitcoin ETF will bring a measure of institutional confidence and a significant amount of funding to the cryptocurrency space.

“This ETF is giving us all breathing space, putting life in the system. That brings in capital that allows the rest of the stuff to flourish. But I think if you look at the crypto long-term plan, it’s on target,” he added.

The potential influence of an Ether spot ETF was also brought up during the investor call. Galaxy Digital’s CEO said its possible approval might not be as well received as a Bitcoin ETF, given that Ethereum’s validating model is based on a staking model and staking yields.

“Unless they can figure out an ETF that actually passes through the staking rewards, it will be kind of a subpar product from just owning Ethereum with someone like us and having it staked,” Novogratz explained.

He added that the technical difference would be significant if investors were looking at yields between 4% and 7%, depending on the method of staking. Utility remains an important factor, with Novogratz stressing that different blockchains and their native tokens need to “serve a purpose” and have “stuff built on them” to sustain long-term value.

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