3 Stocks to Watch as Approval of Crypto ETF Applications Looms

By James Lim Bitcoin, Crypto, World Cryptocurrency 0 Comments

As of Dec 27, the price of bitcoin (BTC) has gained 155.2% year to date after collapsing in November 2022 following the fall of FTX, the exchange founded by Sam Bankman-Fried. Ethereum (ETH) is up 86.1% in the same period. The crypto recovery in 2023 has been led by the possibility that the Securities and Exchange Commission (“SEC”) could finally start approving crypto spot ETF filings, and pave the path for the benchmark crypto to go mainstream.

There had been roadblocks, however, as the SEC was seemingly stalling approval of these applications because of a lack of reliability in the sector. The pressure kept on mounting on the regulatory body as big-time players from the traditional marketplace entered the fray. In fact, a federal judge earlier this year sided with investment firm Grayscale Investments in ruling that the SEC wrongly denied its application.

In November, Binance, a leading crypto exchange, acceded to the demands of the regulators and allowed closer scrutiny of its business on the heels of CEO Changpeng Zhao stepping down and pleading guilty to U.S. money laundering charges. As ominous as it may sound, this went a long way in convincing regulators that major players in the industry can be monitored and remain answerable to regulation.

Therefore, it did not come as a surprise that on Nov 30, in what can be dubbed a watershed moment for the crypto market, the SEC called for public opinion on a proposed rule change that will allow Fidelity Investments, an asset management giant, to list and trade shares of the Fidelity Ethereum Fund.

This has opened up opportunities for various traditional finance giants who have applied for a spot in crypto ETFs. Investor optimism is currently on a very high level as it is increasingly becoming clear that the regulatory body might stop stalling these applications and pave the way for crypto to go mainstream. In fact, market participants are anticipating the approvals to start coming through as early as January 2024.

Thus, one must track some of the major spot crypto ETF applicants at this current juncture to understand the impact this news might have on them. These are some of the biggest names in the traditional marketplace that have decided to explore the crypto space in recent months.

BlackRock, Inc. BLK: This enterprise risk management and fixed-income institutional asset manager applied to launch a crypto exchange-traded fund in June. BlackRock is the world’s largest asset manager. BlackRock’s expected earnings growth rate for the current year is 4.2%. BLK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Invesco Ltd. IVZ: This investment management company had first filed for a Bitcoin ETF in 2021 but dropped it in October of the same year. However, in June 2023, it joined the race to be the first investment industry giant to launch a Bitcoin ETF. Invesco’s expected earnings growth rate for the current year is -15.5%. However, it is projected to grow at a rate of 11.3% in 2024. IVZ currently carries a Zacks Rank #4 (Sell).

WisdomTree, Inc. WT:This ETF sponsor and asset manager also joined the crypto ETF race by applying for one in June 2023. WisdomTree’s expected earnings growth rate for the current year is 38.5%. WT currently carries a Zacks Rank #3.

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3 Stocks to Watch as Approval of Crypto ETF Applications Looms