What is Bitcoin ETF?
In simpler terms, a Bitcoin ETF functions as a tradable asset on both stock and crypto exchanges. Importantly, users aren't required to possess any actual Bitcoin. Essentially, an ETF provides an avenue for investing in Bitcoin without direct BTC ownership; instead, users acquire a share that signifies ownership of the digital asset.
ETFs serve as a connection between conventional stock markets and cryptocurrencies. They offer a solution for individuals interested in crypto investment but face challenges in securely storing and managing it for various reasons.
Bitcoin EFT is Approved
The US Securities and Exchange Commission (SEC) has officially given its nod to a Bitcoin ETF, putting an end to the long-standing debate within the crypto community about its feasibility.
The regulatory body swiftly responded with an official statement, issued within 24 hours of its Twitter account being compromised and the ETF approval becoming a reality.
This development had a profound impact on the crypto landscape, triggering a notable $1000 surge in Bitcoin's price.
In summary, January 10, 2024, marks a historic milestone, as it signifies the first-ever approval of a Bitcoin ETF.
The SEC has granted permission to 11 entities to list Bitcoin ETFs on their platforms, broadening access to cryptocurrencies for individuals who have previously hesitated to delve into Bitcoin and the broader crypto industry.
Major investment powerhouses like BlackRock, Fidelity Investment, and Invesco played pivotal roles in securing ETF approval. Over a span of approximately six months, these giants actively engaged in discussions with SEC representatives and invested millions in the crypto space to pave the way for this significant achievement.
How will it affect Bitcoin Price?
Since 2022, Bitcoin has experienced a prolonged downturn, with the asset's value steadily decreasing. However, the final months of 2023 brought a positive turn for investors and crypto buyers, coinciding with the activation of the ETF community and heightened interest from major industry players. Over the last three months, Bitcoin's price has surged by approximately 70%.
Financial firm Standard Chartered anticipates that the approval of ETFs could inject $50 to $100 billion in annual investments into the industry, potentially propelling the price of Bitcoin to $100,000.
While the optimistic outlook prevails, it's crucial to maintain a realistic perspective. The recent ETF-related excitement has led to a swift $1,000 increase in the asset's price within the last 24 hours (from January 10 to 11). Prospective crypto buyers are keenly observing Bitcoin's current growth, navigating the evolving landscape with a watchful eye.
Why should someone buy Bitcoin ETF instead of Bitcoin?
A significant number of individuals express interest in entering the crypto space but find the prospect of trading coins or tokens akin to learning a new language – a daunting task. This perception, albeit outdated, contributes to the perceived difficulties associated with venturing into the crypto realm.
For many, the notion of purchasing Bitcoin ETF holds greater appeal compared to acquiring actual Bitcoin. The rationale lies in the perceived ease of managing the investment through user-friendly platforms, eliminating the need to grapple with intricate technical details. The idea here is that Bitcoin ETFs offer a more accessible entry point into the world of crypto for those looking for a smoother on-ramp.
How to Buy Bitcoin ETF?
To initiate the purchase of a Bitcoin ETF, the first step involves registering and creating an account on a suitable investment platform. Once you have successfully set up your account, the process of buying a Bitcoin ETF is akin to acquiring traditional stocks or shares of any other company.
Here's a step-by-step guide:
Start by registering and creating an account on your preferred investment platform. Ensure that the platform supports the trading of Bitcoin ETFs.
Navigate the platform and search for a Bitcoin ETF using its ticker symbol, which is the asset abbreviation. For example, Bitcoin's ticker symbol is commonly represented as BTC. Ensure you choose the correct ETF, as various ETFs may exist for different purposes.
Once you've identified the Bitcoin ETF you wish to purchase, indicate the amount you want to invest. This could be in the form of the number of shares or a specific monetary value.
Confirm the purchase and the acquired Bitcoin ETF will be added to your investment portfolio on the platform.
The flexibility of Bitcoin ETFs allows you to exchange them back into the national currency at any time. This feature provides liquidity and ease of managing your investment.
Which Platforms do support Bitcoin ETF?
BlackRock – IBTC
Grayscale – GTBC
21 Shares & ARK – ARKB
Bitwise – BITB
VanEck – HODL
Wisdomtree – BTCW
Invesco & Galaxy Digital – BTCO
Fidelity – FBTC
Valkyrie – BRRR
Hashdex – DEFI
Franklin Templeton - EZBC