Institutional Investors and Cryptocurrency ETFs: Lessons from the U.S. and Prospects for Japan｜WebX2026

Institutional Investors and Cryptocurrency ETFs: Lessons from the U.S. and Prospects for Japan

About two and a half years have passed since the approval of the Bitcoin spot ETF in the United States. How far has the entry of institutional investors progressed, and what has changed? At WebX 2026, speakers included Mr. Dowling (President of Bitcoin Standard Treasury), Mr. Lai from Fidelity International, Mr. Dagostino from Coinbase, and Mr. Tojo from BlackRock Japan. They discussed the lessons learned from the U.S. experience and the prospects for the Japanese market, where the legalization of cryptocurrency ETFs is anticipated, from multiple perspectives.

How ETFs Changed the Landscape for Institutional Investors

When Mr. French posed the question of how the emergence of the Bitcoin spot ETF has changed the demand structure for institutional investors, Mr. Lai organized the changes into a three-stage framework: "access, acceptance, and allocation." Before the introduction of the Bitcoin spot ETF, institutional investors faced various frictions in accessing cryptocurrencies. The ETF significantly removed those barriers. The central discussion has shifted from "Can we safely access Bitcoin?" to "How do we construct an allocation from scratch?" Changes in education are also evident. The number of institutions investing in Bitcoin spot ETFs has doubled over the past two years, with approximately 2,400 organizations currently holding them. This reflects the active use of cryptocurrency ETFs by institutional investors as an entry point into this asset class.

Three Risks Faced by Institutional Investors

Mr. Lai outlined three challenges that institutional investors considering entry into cryptocurrency ETFs must face. First is market risk. Cryptocurrencies, including Bitcoin, are highly volatile, and spot ETFs are directly linked to their price movements. Second is technological risk. Smart contracts are built with code and carry inherent risks, but the ETF structure delegates this risk management to asset management companies and custodians, significantly reducing it compared to direct holdings. Third is regulatory risk. Regulatory frameworks across countries remain uneven, and institutional investors need to monitor regulatory trends in each region and establish systems to adapt to changes.

Lessons from the Approval Process and Implications for Japan

When asked about insights gained from the ETF launch in the U.S., Mr. Dowling candidly discussed the difficulties of the approval process and the dramatic changes that followed legalization. The launch of the Bitcoin spot ETF has become one of the most successful ETFs in history. With the SEC's endorsement, financial advisors managing a large portion of individual assets in the U.S. can now provide Bitcoin exposure to clients within a regulated framework. This "release of efficiency" has led to massive capital inflows, and the ecosystem has further developed into options trading and staking. In Japan, a bill to amend the Financial Instruments and Exchange Act was passed by the House of Representatives in June 2026. A transition to a framework that positions cryptocurrencies as "financial products" similar to stocks and bonds is planned, and the listing of cryptocurrency ETFs is expected to be legalized after approval and implementation in the House of Councillors (anticipated around 2027).