Bitcoin ETFs: The Bull Case

Word
on
the
street
is
that
a
bitcoin
ETF
will
be
approved
this
week,
which
would
mark
a
milestone
for
the
world’s
first
cryptocurrency,
if
only
because
there
has
been
tremendous
media
interest
in
these
investable
products.
Bitcoin
already
has
mainstream
attention
and
interest
from
Wall
Street.
What
a
spot
bitcoin
exchange-traded
fund
(ETF)
would
provide,
apart
from
potentially
positive
momentum
for
bitcoin’s
price,
would
be
a
signal
of
the
asset’s
maturity.

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In
other
words,
the
bull
case
around
an
ETF
boils
down
to
legitimization.
Even
before
Gary
Gensler,
the
current
chairman
of
the
Securities
and
Exchange
Commission
(SEC),
took
charge,
the
U.S.
government
was
hesitant
to
approve
crypto
ETFs
because
of
the
possibility
of
market
manipulation
and
fraud.
ETFs,
which
are
like
mutual
funds
except
typically
more
tax
efficient
and
lower
cost,
are
a
relatively
new
and
quick
growing
segment
of
traditional
finance.

See
also:



Bitcoin
ETF
Approval
Odds
Raised
to
Over
90%
by
Bloomberg
Analysts

Mere
attempts
by
firm’s
like
financial
players
including
Fidelity,
VanEck
and
BlackRock
in
launching
BTC
ETFs
is
already
a
major
endorsement,
so
how
much
more
significant
would
actual
investors
be?
Larry
Fink,
the
CEO
of
the
world’s
largest
asset
manager,
BlackRock,
said
the
firm
is
interested
because
it
sees
legitimate
demand
from
its
clients
in
a
spot
bitcoin
ETF.

For
full
coverage
of
bitcoin
ETFs,
click



here.

Although
many
types
of
crypto-based
ETFs
are
already
live,
the
much-anticipated
spot
bitcoin
ETF
would
allow
institutions
to
more
easily
gain
exposure
to
crypto
as
well
as
everyday
investors
to
indirectly
add
bitcoin
to
their
Roth
retirement
accounts
and
401(k)s.
This
opens
bitcoin
to
a
new
set
of
buyers
and
sellers,
including
financial
advisers
who
for
years
have
been
looking
for
off-the-shelf
solutions
for
crypto
investing.

Perhaps
more
important
are
the
financial
products
that
could
be
built
around
bitcoin
ETFs,
like
the

“model
portfolios”
that
BlackRock
creates
for
anyone
from
mom-and-pop
to
the
ultra
high-net
worth
investors.
Bitcoin’s
historic
volatility
makes
it
an
easy
way
to
change
up
ready-made
investment
products
for
any
level
of
risk
tolerance
(though
some
speculate
bitcoin
will
become
less
volatile
as
more
capital
flows
in).

If
this
plug-and-play
model
comes
to
pass,
where
any
financial
institution
can
add
bitcoin
to
any
number
of
financial
products,
it
could
mean
millions
of
people
could
one
day
have
exposure
to
bitcoin.
This
could
be
politically
favorable
for
the
crypto
industry,
as
it
might
make
legislators
less
inclined
to
make
decisions
that
materially
affect
their
constituents.

Of
course
there
are
many
open
questions
regarding
a
bitcoin
ETF,
including
if
any
particular
firm
will
dominate
the
field.
What
would
it
mean
if
BlackRock
became
the
world’s
largest
bitcoin
holder
for
Bitcoin’s
development
and
governance,
for
instance?
Market
surveillance
is
an
SEC
requirement,
which
is
bad
news
for
privacy
—
but
is
it
also
a
backdoor
to
censoring
transactions?

Today’s
bitcoin
holders
will
have
to
wait
and
see,
but
first
an
ETF
has
to
launch.