Bitcoin ETFs Are Good, But Crypto Hedge Funds And Bitcoin ATMs Are Far More Effective
Apparently, the prospect of the introduction of Bitcoin Exchange-Traded Funds (ETF) is the current obsession amongst members of the Bitcoin community. Over the last month, eh SEC has been constantly shifting its position on Bitcoin ETFs, having rejected some proposals and stalled others.
The most noteworthy advantage of Bitcoin ETF, according to is proponents, is that it would enable Bitcoin and its derivatives to be easily accessible on leading stock trading markets.
For this reason, the cryptocurrency would benefit from the trillions of dollars invested by corporate institutions, thereby increasing the adoption as well as the value of Bitcoin. However, advocates of Bitcoin ETF are neglecting Bitcoin ATMs and crypto hedge, factors that are far more likely to positively affect the price of Bitcoin than ETFs.
A significant majority of the suggested Bitcoin ETFs, including the ones that have been withheld temporarily for further scrutiny, are paper Bitcoins. Some options, such as Direxion and Proshares Bitcoin ETFs, are exclusively backed by cash, meaning that if they receive colossal amounts of monetary investments, they are unlikely to affect the value of Bitcoin.
For an ETF to have a direct impact on the value or demand of Bitcoin, it has to be backed by Bitcoin itself. Unfortunately, such ETFs, including Winklevoss Bitcoin Trust ETF and VanEck SolidX Bitcoin ETF, have been rejected and stalled respectively.
From an institutional investors’ perspective, the increase of crypto hedge funds across the world is mores significant than Bitcoin ETFs. As of now, the number of crypto hedge funds globally is almost reaching the 500 mark. The inclination towards crypto hedge funds is because such services provide a global platform for corporate investors to invest in digital currencies in a manner that is both secure and legally compliant.
Despite having far much more investment options than ETFs, the Bitcoin community does not seem to be overly excited by the proliferation of crypto hedge funds.
Undoubtedly, the most important factor to the growth of Bitcoin’s value is promoting its adoption among the masses. Of late, the number of Bitcoin ATMs has skyrocketed, with the total global estimate being 3,600 at the time of writing. Moreover, five ATMs are installed on a daily basis worldwide.
Five years ago, there were only five Bitcoin ATMs globally. However, the demand for Bitcoin has soared due to the ongoing cryptocurrency boom, leading to the installation of additional machines. Nowadays, it is possible to use Bitcoin to buy conventional goods and services, implying that the ATMs have fostered the mass adoption of the virtual currency.
The popularity of Bitcoin is mainly due to its inherent benefits. Since it is decentralized, authorities can neither seize nor freeze it. Its digital nature significantly reduces the risk of the theft, as well as making its transfer easier and faster. Furthermore, the Bitcoin network is secured by state-of-the-art cryptographic algorithms, making it impossible to hack.
Nonetheless, the decentralization and freedom from government regulation is perhaps the most notable advantage of Bitcoin. Unlike fiat currencies, which are entirely controlled by governments, Bitcoin has a fixed supply and cannot be printed anyhow to offset budget constraints. This, coupled up with the consistently imposing technological infrastructure, has created a conducive environment for the global adoption of the world’s first digital currency.
In conclusion, it is worth noting that though Bitcoin-based Bitcoin ETFs have their advantages, they are certainly not necessary. Evidently, laying the actual groundwork (installing Bitcoin ATMs and promoting crypto hedge funds) is far more effective in driving up the mass adoption and the market value of Bitcoin.