- The SEC is evaluating applications for Bitcoin ETFs from prominent companies.
- Introducing a spot Bitcoin ETF could address current investment drawbacks.
- BlackRock’s Bitcoin ETF submission has sparked excitement and increased BTC demand.
The US Securities and Exchange Commission (SEC) has recently announced its intention to comprehensively evaluate the applications submitted by six prominent entities seeking to establish exchange-traded funds (ETFs) for bitcoin in the spot market. Among the esteemed companies whose proposals have been deemed worthy of consideration by the SEC are BlackRock, VanEck, Bitwise, WisdomTree, Fidelity, and Invesco.
The Securities and Exchange Commission (SEC) has initially reviewed the Bitcoin ETF applications submitted by various companies. In a recent analysis conducted by the New York Digital Investment Group (NYDIG), a prominent Bitcoin firm, significant transformative shifts within the Bitcoin community were highlighted as potential outcomes upon approving a spot Bitcoin ETF.
According to NYDIG’s research, introducing a spot ETF in the Bitcoin market would address several drawbacks of current investment options. An ETF is expected to exhibit lower tracking error and improved liquidity compared to private funds and trusts. While the exact trading fee for spot Bitcoin ETFs remains uncertain, the research suggests that expenses associated with such ETFs are likely to be relatively low.
Introducing a spot ETF offers investors a dependable option, ensuring their security and making ETFs a reliable choice. Additionally, Bitcoin ETFs are expected to enhance the ease and convenience of BTC trading, providing the community with improved methods for reporting positions, assessing risks, and fulfilling tax obligations. NYDIG draws a compelling comparison between BTC and gold, emphasizing their significance in the crypto industry.
Bitcoin is about 3.6x more volatile than gold, meaning that on a volatility equivalent basis, investors would require 3.6x less bitcoin than gold on a dollar basis to get as much as risk exposure. Still, that would result in nearly $30B of incremental demand for a Bitcoin ETF.
NYDIG’s optimistic stance on the potential of a spot Bitcoin ETF does not necessarily reflect a universally positive sentiment within the industry. JPMorgan, a prominent financial services firm, has previously expressed skepticism regarding the impact of Bitcoin ETFs, citing their lackluster performance in international markets.
BlackRock’s submission of a Bitcoin ETF has sparked significant excitement within the Bitcoin community, prompting a surge in individuals seeking to amass BTC holdings. Anthony Pompliano, the esteemed founder of Pomp Investments, has aptly remarked, “The race to accumulate Bitcoin is now in full swing.”
