The ongoing talks of a possible bitcoin exchange-traded fund (ETF) has gotten the crypto verse all talking, as it opens doors to new investors (i.e. accredited and retail) leading to increased volumes and heightened values.
The notion of ETF alone will allegedly attract institutional investors as they will be given a platform in which their funds will be protected, as opposed to investing on one’s own and worrying heavily on instability.
Here’s why a bitcoin ETF matters:
With the release of an ETF, this allows investors to add bitcoin to their retirement portfolio.
Global Pensions Market: $41.3T
If bitcoin captures just 1% of global pensions, that would create $413,000,000,000 of exposure for cryptocurrencies.
— Nicholas Merten (@Nicholas_Merten) July 24, 2018
International speaker and crypto specialist, Nicholas Merten took to Twitter on July 24 to argue on what seems to be the reasons why a bitcoin ETF is essential. It appears that he made three points and they are as follows:
“[1.] With the release of an ETF, this allows investors to add bitcoin to their retirement portfolio. [2.] Global Pension Market: $41.3 T. [3.] If bitcoin captures just 1% of global pensions, that would create $413,000,000,000 of exposure for cryptocurrencies.”
Similarly, Kevin O’Leary, an investor on the show, Shark Tank believes that a bitcoin ETF could do wonders for the crypto market, as institutional investors will less likely be hesitant to enter the market.
Therefore, it is clear that a bitcoin ETF is a must to help the infant market mature some more. However, the question now becomes, whether or not it will happen in 2018. Based on some analysts, it is highly unlikely.
For instance, CEO of BKCM, Brian Kelly shared several specs of the crypto market on CNBC’s Fast Money segment. He hopes for an ETF, however the chances of it happening in 2018, to him, are “relatively low”. He also added that the SEC’s approval normally takes some time, especially when the asset under consideration is fresh.
The speculation on a bitcoin ETF originated from the news that the Chicago Board Options Exchange (CBOE) filed for a bitcoin ETF with the SEC to establish the likes on the traditional stock market.
As per CCN’s reporting, SEC has been hesitant on such matters in the past due to the ineffective regulations on cryptocurrencies abroad. In addition, the fact that financial institutions were not able to supervise crypto trades made them prolong their decision. Both areas have now improved, with the former doing fairly well, and the latter having an example like CBOE, a firm known to stick by regulations.
CBOE’s participation within a crypto-backed ETF, has many investors confident that the approval will be granted, but if it will be acted upon within the next five months or so is still questionable.