![]() This was always a strange argument, since bitcoin futures, prior to the futures ETF approval, were traded in huge volumes on lightly regulated international crypto exchanges. The decision hinged on the SEC approval of a bitcoin futures ETF in 2021, when Chair Gensler argued that the futures market had more built-in investor protections than the spot market. The ETF is on the table now because, after years of the SEC rejecting bitcoin ETF applications, a recent court decision appears to have forced the agency’s hand. Opening more direct, reliable exposure to bitcoin seems likely to have major secular benefits for BTC’s price by raising the base level of demand. It either requires buying and holding via an exchange like Coinbase, which isn’t allowed for a lot of traditional asset management setups or trading imperfect bitcoin proxies such as the stock of Michael Saylor’s Microstrategy, with its vast trove of BTC. ![]() Bitcoin ETFs are legally different from holding BTC directly, allowing investors to effectively buy bitcoin, albeit indirectly, under conventional brokerage and retirement accounts.Ĭurrently, with some exceptions, investing in bitcoin is more difficult than that. These stock-like assets would represent claims on underlying holdings of Bitcoin managed by ETF issuers, and so should closely track the BTC price. Securities and Exchange Commission (SEC) will begin approving Bitcoin “spot” ETFs, or exchange traded funds. Why is a BTC ETF back in the headlines?īitcoin (BTC) has shot up more than 20% over the past week because of rising expectations that the U.S. Even leaving crypto’s ethos aside, there are other downsides to the ETF approval – not least that the current rally could lead to another unsustainable, ultimately damaging crypto-bubble. While it has many potential benefits for investors and BTC’s price, some have argued that it isn’t true to the spirit of crypto, since it relies deeply on third party custody. ETFs can be bought and traded in traditional brokerage, retirement, and institutional investment vehicles, and the judgment has triggered a huge rally in bitcoin, and crypto as a whole, in anticipation of a wave of new investors.īut the quest for a spot Bitcoin ETF has always been controversial among crypto advocates. A Federal appeals court on Monday finalized its decision to overturn the SEC’s prior rejection of Grayscale Investments’ application to convert its Grayscale Bitcoin Trust into an Exchange Traded Fund, or ETF, tracking the “spot” price of BTC. ![]()
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