What Will Happen When Spot Bitcoin ETF Be Approved?

On January 11, 2024, Spot Bitcoin ETFs are officially approved by SEC. People are excited about the approval of a Spot Bitcoin ETF, thinking it could really shake things up in the Bitcoin world and the whole cryptocurrency scene. This article looks into the approval's details, what happens when it gets approved, talks about where things are in the approval process right now, and when it might happen. Keep up with the latest on Bitscreener Blogchain.
The U.S. Securities and Exchange Commission (SEC) has granted approval for all 11 spot Bitcoin exchange-traded funds (ETFs). This move is expected to make Bitcoin investing more accessible to Main Street investors without requiring direct cryptocurrency ownership. SEC Chair Gary Gensler emphasized the risks associated with cryptocurrencies and products linked to them, even though the SEC approved the ETFs. Bitcoin's market cap stands at around $900 billion, with price fluctuations throughout its history.
Despite a fake post on the SEC's Twitter account claiming approval of Bitcoin ETFs, the regulatory agency officially approved all 11 applications, and the FBI is investigating the hack. Investors should be aware that Bitcoin ETFs carry similar risks to investing in Bitcoin directly, as the cryptocurrency remains highly volatile. While critics raise concerns about volatility and fraud, supporters view the approval as a bridge between traditional finance and the cryptocurrency world, making Bitcoin more accessible to investors. Some of these approved ETFs will commence trading shortly.***1745187657053786373***
A Spot Bitcoin ETF is an investment fund that tracks the price of Bitcoin. Unlike Bitcoin futures ETFs, which invest in futures contracts that track the future price of Bitcoin, Spot Bitcoin ETFs directly hold physical Bitcoin. This means that the value of a Spot Bitcoin ETF will closely track the price of Bitcoin on the open market.
Spot Bitcoin ETFs are traded on traditional exchanges, such as the New York Stock Exchange (NYSE) and Nasdaq, just like stocks and other ETFs. This makes them more accessible to investors than Bitcoin itself, which can be difficult to buy and sell due to its volatility and complexity.
A Spot Bitcoin ETF is like getting a backstage pass to the Bitcoin world without having to deal with the actual hassle of holding bitcoins. Instead of dealing with complicated stuff, you can buy shares in the ETF, which is like buying a piece of the Bitcoin action.
When you invest, the ETF takes the money and uses it to buy real bitcoins, and these are kept safe and sound by the ETF. The value of your ETF shares is like a mirror reflection of what's happening with Bitcoin's price. If Bitcoin's price goes up, your ETF shares go up too.
The beauty of it is, you can easily trade these ETF shares on regular stock exchanges. No need to worry about the nitty-gritty of dealing with digital wallets or securing actual bitcoins – the ETF handles all of that for you.
Spot Bitcoin ETFs offer several benefits to investors, including direct Bitcoin exposure, diversification, and so on. Some advantages can be mentioned below:
Process For A Spot Bitcoin ETF To Be Approved
The process for getting a Spot Bitcoin ETF approved by the SEC is rigorous and involves multiple steps:
The timeline for SEC approval of an ETF application can vary depending on the complexity of the application and the SEC's workload. However, it typically takes several months for the SEC to review an ETF application and make a decision.
Evaluation Factors For A Spot Bitcoin ETF Application
When the SEC is evaluating a Spot Bitcoin ETF, they're looking at four key things:
If the SEC is satisfied with the answers to these questions, they will approve the ETF. This means that investors can be confident that they are putting their money into a safe and well-run investment product.
The SEC has not yet approved a Spot Bitcoin ETF, but they may be more open to doing so in the future. The SEC has been concerned about market manipulation and fraud in the Bitcoin market, but there are now a number of Spot Bitcoin ETF applications pending with the SEC. This suggests that the SEC is taking Spot Bitcoin ETFs more seriously and may be willing to approve one soon.
There are a number of factors and events that approval could come in the very near future.
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The green light for a Spot Bitcoin ETF is widely expected to have a profound impact on both the Bitcoin market and the broader cryptocurrency industry.
One immediate effect would be a surge in institutional investment in Bitcoin. Spot ETFs provide a more efficient and accessible avenue for institutional investors to enter the Bitcoin space compared to direct investment or futures contracts. This could result in a substantial influx of capital, potentially driving up Bitcoin prices.
Spot ETFs would enhance the liquidity of the Bitcoin market, simplifying the process for buyers and sellers to connect and execute trades. This increased liquidity may lead to tighter spreads and more efficient pricing dynamics.
Approval of a Spot Bitcoin ETF would signify a significant vote of confidence in Bitcoin by the US Securities and Exchange Commission (SEC). This endorsement would signal to the market that Bitcoin is a legitimate and regulated asset class.
A Spot Bitcoin ETF would contribute to the broader awareness and adoption of Bitcoin. As ETFs are a familiar and trusted investment product for many investors, the approval of a Spot Bitcoin ETF could facilitate easier understanding and investment in Bitcoin, potentially fostering wider adoption of the cryptocurrency.
Experts believe that the price of Bitcoin is likely to go up significantly after a Spot Bitcoin ETF is approved. This is because large investment firms are likely to start putting a lot of money into Bitcoin through ETFs, which would increase demand and drive up prices. Our analysis suggests that Bitcoin is on track to reach a high of $31,776.21 in 2023. This is a significant price increase, but it is not unrealistic given the growing adoption of Bitcoin and the increasing interest from institutional investors after a Spot Bitcoin ETF is approved. Below is a summary of BTC long-term price prediction from 2024 to 2030:
Bitcoin Price Prediction from 2024 - 2030. Source: Bitscreener