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Could Bitcoin ETFs Spark a Major Bull Run?
Traders Magazine Online News, August 9, 2018
A Bitcoin ETF could be approved by the SEC as early as 16th August 2018, with many predicting an approval could spark the biggest bitcoin bull run ever…
The cryptocurrency mania of late 2017 really started as a result of rumours surrounding Bitcoin futures contracts (which are quite different to ETF’s), where the price exploded from $3.5k in Sepetember to $10,000 by the end of the year.
Sure enough, the CME stepped in on the 1st of December to announce that they were launching Bitcoin futures in mid-December. Bitcoin finally topped out at nearly $20,000 the day that CME futures were launched. Crypto mania was quickly replaced by a crypto winter.
Bitcoin’s decline was nearly as fast as it’s rise and we have been in a seven-month bear market ever since.
Fast forward to now…
News publications and social media are all starting to get excited right now and it’s all because of one impending decision – The possibility that a Bitcoin ETF might finally be approved, providing a dramatically easier way for investors to gain exposure to Bitcoin.
What Is An ETF?
ETF is the shorthand for an ‘Exchange Traded Fund’. These financial products track the performance of commodity, index or basket of assets. ETF’s are traded like stocks and prices fluctuate throughout the trading day.
When it comes to Bitcoin, ETF’s essentially provides an easy way to gain exposure to Bitcoin. They also have the added benefit that the owner doesn’t need to worry about Bitcoin storage or security. This is instead the responsibility of the ETF provider.
The road to a Bitcoin ETF has been a long and hard one. Indeed, the famous Winklevoss twins proposed a Bitcoin Trust, that looked and smelled like an ETF all the way back in 2013. Over the last five years, numerous attempts have been made to get a Bitcoin ETF approved and they have all failed. Why are people so optimistic that the Bitcoin ETF will be approved this time around?
Most commentators believe that the latest ETF application will be approved due to how the ETF is structured. Average retail investors simply don’t have nearly $200k lying around to invest in Bitcoin. This means that the SEC’s main concern of protecting retail investors is satisfied.
Both cryptocurrency commentators and the CBOE have both concluded that the latest proposal meets all of SEC’s ETF approval requirements. This, coupled with a maturing cryptocurrency market, has led to widespread optimism around the approval of the ETF.
Would a Bitcoin ETF Drive The Price Higher?
It’s not too much of a secret that many financial institutions and high-net-worth individuals are interested in investing in cryptocurrencies.
Financial giants with trillions of client funds under management such as Blackrock, J.P.Morgan, and Fidelity have all expressed interest in cryptocurrencies in 2018.
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