May 26, 2024
NFTs Poised for Revival After Approval of Spot Bitcoin ETF
Bitcoin ETF

NFTs Poised for Revival After Approval of Spot Bitcoin ETF

The recent approval of the first spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC) is seen by Web3 professionals as a potential catalyst for revitalizing the struggling nonfungible token (NFT) ecosystem.

According to Bill Qian, chairman of crypto investment firm Cypher Capital, the approval of spot Bitcoin ETFs could indirectly benefit perceived “alternative assets” like NFTs. Qian suggests that as mainstream finance embraces Bitcoin due to the ETF approval, investor interest in NFTs might also increase.

“The growing understanding and acceptance of Bitcoin will likely spill over, increasing investor curiosity and appetite for NFTs,” explained Qian, highlighting the potential for a broader embrace of NFTs as a viable investment alongside BTC.

Oscar Franklin Tan, CFO of Atlas Development, a key contributor to the NFT platform Enjin, believes that the spot Bitcoin ETF approvals will have a positive impact on NFTs. Tan referred to the Ordinals protocol, which, in the last 30 days, recorded over $800 million in sales volume, as evidence that “Bitcoin has NFTs.”

“No one needs to explain anything. They can just point to the ETF, complete with the big names of BlackRock, Fidelity and Coinbase.”

Tan emphasized that the ETF approvals serve as “crucial validation,” indicating SEC approval for retail participation in the largest digital asset, Bitcoin. He further suggested that Ether ETFs could follow, potentially reigniting interest in Ethereum-based NFTs like Bored Ape Yacht Club and CryptoPunks.

Sergey Sheleg, chief product officer of the Web3 social platform Nicegram, sees the integration of traditional financial structures like ETFs with crypto as a positive signal for the NFT market. Sheleg believes this integration could boost confidence and encourage more institutional involvement in the NFT space.

Sheleg noted the rapid evolution of regulations around digital assets, suggesting that this development would benefit NFTs beyond initial hype, impacting use cases such as ticketing, fractional art ownership, and identity management.

Dirk Lueth, co-founder of NFT gaming platform Upland, expressed that ETFs could reduce perceived risk and complexity in entering the crypto market. This, in turn, may create more comfort for individuals to engage in NFT purchasing activities. Lueth anticipates growth in the NFT space alongside increased market liquidity, reduced price volatility, improved infrastructure, and regulatory clarity.

Photo by Markus Winkler

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