Today, the potential opening of spot ETF funds for bitcoin is one of the most discussed topics in the cryptocurrency industry. All market participants are tensely watching the actions of the SEC and the results of its decisions. However, what is the reason for such interest? The fact is that the launch of such funds can bring a lot of new opportunities to the sphere of digital assets, as well as provide additional income to investors located in countries where cryptocurrency trading is prohibited.
Within this article, we will go into detail about what constitutes such a phenomenon as a bitcoin-ETF. We will also look at how the community and developers are responding to the current hype.
What is a bitcoin-ETF?
ETF itself stands for Exchange Traded Funds, which literally means “a fund that is traded on an exchange”. From this we can draw a conclusion regarding the principle of operation of such an instrument: in order for investors to receive income, companies offer them shares of the purchased assets. Moreover, the size of such shares each institution can determine independently. In some cases it reaches 70%, and in others -100%.
Thus, bitcoin-ETF is just such a spot fund with shares for investors, which works exclusively with the main cryptocurrency. Consequently, investors investing in bitcoin-ETF shares can earn additional income when the price of the asset rises.
It is important to note that at the same time, the buying process itself is not carried out on the usual cryptocurrency exchanges, but on more traditional trading platforms. It should also be taken into account that, despite all the similarities with the purchase of shares, ETF-ETFs usually include a whole set of different assets.
However, what is the difference between buying the digital assets themselves and buying shares of the fund? It’s very simple: when an investor invests in tokens, he or she becomes their owner. Accordingly, the process of storing the coins and all related risks become his responsibility. However, if he buys shares in an existing fund (as, for example, with bitcoin), he does not own the tokens directly.
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Opening this type of fund has significant potential. First, many experts argue that SEC-approved applications could push BTC to new price heights. Secondly, they are already inspiring developers to create assets that can bring owners substantial income after the launch of ETFs. One such project is the Bitcoin ETF, a coin that is currently on presale and in demand ahead of the big event.
What is a spot bitcoin ETF being created for and when will it be approved?
Spot funds are created by the companies themselves, and they also carry out the entire management process. Representatives of such organizations (for example, BlackRock, iShares and Charles Schwab) can not only carry out trading activities, but also change the composition of their funds at any time.
Today, the ETF fund is one of the most functional financial instruments. Turning to statistics, it can be seen that at the end of 2021, the total amount of funds in such funds amounted to about $10 trillion. That is why the crypto community is so eagerly awaiting the opening of ETFs for bitcoin. Market participants assume that this move will help raise the price of BTC and simplify its use outside the cryptocurrency sphere.
It should also be noted that working with bitcoin spot funds will help to greatly simplify the whole process of diversifying investors’ portfolios. Buying shares instead of actual coins additionally has a number of important advantages. For example, ETFs do not oblige traders to keep their savings or trade them. They have a very simple legal structure and a stable operating principle that can pay off in the long run.
Another distinctive feature of ETFs is the opportunity to popularize the cryptocurrency segment and bring it to the general financial market. The fact is that by buying shares in bitcoin-ETF funds, users may not delve into specific aspects of the industry. They just need to get a brokerage account and formalize the transaction through a specialist or company. Analysts themselves claim that this way it will be possible to attract more investors of the traditional stock market and increase the level of acceptance of BTC.
In addition, the popularity of this phenomenon is so high that corresponding developments are beginning to appear on the market. For example, the Bitcoin ETF project allows you to earn assets and follow the news about the actions of the SEC. Due to such great excitement and close attention, there is every reason to believe that the approval for the opening of spot funds will be presented already at the beginning of next year.
How can retail investors capitalize on this historic event?
The potential opening of spot ETF funds for bitcoin is a really important event for the industry. While some market participants were waiting for the SEC’s decision, others created a promising project called Bitcoin ETF, completely inspired by the upcoming changes in the market. At the heart of this startup is a well known to traders steaking mechanism, through which users can receive additional BTCETF tokens. The coin has already raised over $500 thousand on the pre-sale, and its value is kept at $0.0052.
It should be noted that the steaking technology is not the only important feature that supports the work of the entire ecosystem of the project. In addition, the platform offers an information block, thanks to which you can track news about bitcoin-ETF.
You can purchase BTCETF tokens now on the developers’ website for $0.0052. Pros:
- The goal of the asset is to significantly lower transaction taxes.
- Having a staking mechanism will help create a supply shortage and increase demand for the asset.
- The staking mechanism will allow for passive earning over the next 5 years.
Completion
The prospect of launching bitcoin-ETF spot funds is a question that worries many. Experts believe that their opening will help to solve several urgent problems that market participants around the world are currently facing. First, it is assumed that the appearance of funds will serve as a kind of “springboard” for the price of bitcoin. Secondly, it will provide access to cryptocurrency to residents of those countries where trading in digital assets is illegal.
In addition, while waiting for news, users can create a strong and active community and earn coins on steaking with Bitcoin ETF. This is a promising project with up-to-date information on related industry events, whose development plan is based on SEC decisions. The last point is especially important, as it allows you to make longer-term forecasts regarding the growth of assets.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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