New Bitcoin ETFs Approved! 🚀 Discover the cryptocurrency market revolution of 2024. We look at the implications of ETFs recently approved by US regulators and how they will reshape crypto investing. Pros, cons and perspectives of large financial institutions revealed.
New Bitcoin ETFs have been approved by US regulators.
Wall Street’s big investment houses have been trying to achieve this literally for years: exchange-listed bitcoin ETFs that would give regular people exposure to the cryptocurrency by buying shares, just as they would with a stock
There were a few ways to invest in bitcoin previously. The two most common methods were owning the cryptocurrency directly and keeping it in a digital wallet, or investing in a bitcoin futures ETF. Bitcoin futures ETFs, in effect since 2021, allow you to invest in the cryptocurrency without owning the underlying asset. Basically, you are betting on the price of bitcoin futures, i.e. contracts that allow investors to buy or sell an asset for a fixed price at a later date. Bitcoin futures track the price of bitcoin closely, but not perfectly.
Just like bitcoin futures ETFs, these new spot bitcoin ETFs will allow you to invest in bitcoin without directly owning it (that’s the job of the ETF provider, usually large investment houses). This means you eliminate digital keys and the hassle of safely storing your bitcoin. That’s an advantage, yes, but on paper, the difference between investing in a spot bitcoin ETF or bitcoin futures isn’t huge. It is simply a closer reflection of the price.
So why all the fuss?
Until now, regulators had rejected applications for spot bitcoin ETFs from Wall Street, worried that these new products would be vulnerable to fraud and market manipulation. However, this began to change over time. And late last year, as regulators appeared closer to granting approvals, the original cryptocurrency rose more than 150%. The rally was at least in part because investors were attracted to the increasingly real prospect of a more stable and accessible cryptocurrency market. Indeed, proponents of these ETFs have high hopes, and some analysts estimate they could unlock $30 trillion of wealth for the token.
This anticipation was especially evident earlier this week when the SEC appeared to announce on X (formerly Twitter) that these approvals were confirmed. Investors immediately rushed to buy bitcoin, sending the cryptocurrency soaring, and then sent it crashing again when the US regulator clarified that the “revelation” was nothing more than a social media hack. A day later, the SEC made its real approval, now much less dramatic, public.
Which Bitcoin ETFs Have Received Approval?
Funds from BlackRock, Invesco, Fidelity and Grayscale were among those given the green light. They have already started to be negotiated. The full list is:
- Grayscale Bitcoin Trust
- Hashdex Bitcoin Futures ETF
- Valkyrie Bitcoin Fund
- Invesco Galaxy Bitcoin ETF
- WisdomTree Bitcoin Trust
- Fidelity Wise Origin Bitcoin Trust
- BlackRock’s iShares Bitcoin Trust
- Franklin Bitcoin ETF
- ARK 21Shares Bitcoin ETF
- VanEck Bitcoin Trust
- Bitwise Bitcoin ETP Trust
Why should you care?
Let’s be clear, you don’t have to care. But this latest batch of regulatory approvals has caused a stir in the market, with some saying it is a watershed moment for bitcoin. And it can be. Here are some points from both sides.
Three reasons to be optimistic
ETFs can boost the price of bitcoin. We’ve seen this happen before: When a major gold ETF began trading in 2006, the price of the precious metal steadily doubled over the next four years.
Access to bitcoin has just become easier and cheaper. Providers offering spot bitcoin funds could attract a new group of retail cryptocurrency enthusiasts and large institutional investors who prefer a lower-effort approach to the asset, along with the lower fees and potential tax benefits associated with ETFs
Retail investor optimism is already pulsing. While last quarter investors were more or less divided on whether the original cryptocurrency would be higher in a year, 56% now expect its price to rise in the next 12 months. And that was before this week’s approvals…
And two reasons not to be optimistic
Some will argue that it is much ado about nothing. JPMorgan analysts said the potential impact of these new ETFs is overblown. They note that bitcoin futures funds have not attracted much investor attention since 2021, and argue that this is unlikely to change with the marginal difference that spot bitcoin ETFs would offer.
There is still a lack of key cryptocurrency use cases out there. While ETF approval could make digital currency more mainstream, the biggest proof of concept would be if cryptocurrencies became a legal means of payment in common places like Walmart and McDonald’s. But ETFs have no cash utility yet, so this driving price movement may only occur further down the line.
Conclusion
The market is very dependent on news and events. Therefore, any positive or negative signal tends to create a herd effect among speculators. Regardless of the direction bitcoin takes, we can weather the volatility of the currency, which has proven to be a great asset for trading. At ZERO, the bitcoin code is BTCUSD.
ZERO Markets is a trusted broker offering CFD trading in the global market. ZERO Markets is fully regulated and licensed for your comfort and security. We offer the best trading environment with reduced spreads from 0.0 pip, latest technology platforms and instant deposit channels.
Trade Responsibly: This e-mail may contain general advice which does not take into account your individual circumstances or objectives. CFD derivative products are highly leveraged, carry a high level of risk and are not suitable for all investors. Features of our products including fees and charges are outlined in the relevant legal documents available on our website. The legal documents should be considered before entering into transactions with us. ZERO Markets does not accept applications from residents of countries or jurisdictions where such distribution or use would be contrary to local laws or regulations. Clients receiving services in Saint Vincent and the Grenadines: Zero Markets LLC, which is a registered company of St. Vincent and the Grenadines, Limited Liability Number 503 LLC 2020 uses the Domain www.zeromarkets.com. Please refer to our SVG Privacy Policy. If you are not the intended recipient of this email please do not print, copy or distribute its content or attachments.
Leave a Reply