In the United States, the official approval of the Bitcoin Exchange Traded Fund (ETF) has happened. For little more than a decade, many stakeholders in the cryptocurrency field have sought approval from that country’s regulator (SEC).
As a result of Bitcoin’s recent surge to roughly $63,000, the crypto market is buzzing with excitement. After a brief dip, Bitcoin’s price has risen back above $61,000, where it stands at the moment.
According to QCP Capital, the approval of the BTC ETF is a positive sign for cryptocurrency investors. In accordance with NewsBTC, the investment vehicles will follow the CME’s Bitcoin futures. Consequently, some have contended that Wall Street and institutions will benefit from a badly executed product.
I think it’s a good thing that the ETF was approved. If anything, a step forward is beneficial to Bitcoin and the broader cryptocurrency market.
said QCP Capital
QCP Capital disagrees with those who oppose the creation of a Bitcoin ETF, believing that the product’s qualities will “sideline institutional” investors. In the end, retail could be dominated by the United States.
When a Bitcoin ETF is built on CME futures, expect it to trade at a premium over the spot price. There may be no motivation for institutional investors to buy this investment option because they can just acquire CME contracts.
This futures-based ETF may not be able to attract adequate new money to cause an exponential rise similar to the one we experienced in Q4 2020.
said QCP Capital
Investors moving “out of Gold ETFs into Bitcoin” could result in a new capital influx into the market. It’s too early to tell if this rise will last.
🤔 Is Ethereum The Next To Get An ETF After Bitcoin?
QCP Capital noted that operators appear to have priced in the Bitcoin ETF approval in addition to the probable lack of adequate flow to store BTC at current levels. For the last few weeks, rumors have circulated that SEC Chair Gary Gensler has hinted at this promising possibility.
As a result, a “buy the rumor, sell the news event” scenario could play out. A future Ethereum ETF with comparable qualities is expected to be approved by the CME, which currently sells ETH-based products. QCP Capital expects this to happen soon.
Other factors could influence market dynamics, such as an increase in CME BTC futures trading volume, an emphasis on other crypto-related issues, and an increase in Bitcoin-based instruments that generate yield.
Another significant issue to consider is whether or not the Grayscale Bitcoin Trust will continue to grow. ETFs have become popular tools for institutions looking to acquire exposure to Bitcoin, but they may become obsolete if they become too popular. As a result, there may be some turbulence in the crypto market.
