If Spot Bitcoin ETF comes true, what will the crypto market be like?

The crypto industry throughout the first half of 2023 was so full of events that there was hardly any time for investors to take a breather. Whether it is the price fluctuation new innovation development And the latest thing that the market is paying attention to is the story. Spot Bitcoin ETF

Spot Bitcoin ETF trend returns as fund giant BlockRock files for U.S. listing making other funds Both those who have never submitted and those who have submitted but were not approved are applying for registration. And this time, it is quite likely that the US Securities and Exchange Commission (SEC) will finally grant approval.

So how will the arrival of the Spot Bitcoin ETF affect the crypto market? I will tell you in this article.

Spot What is a Bitcoin ETF?

Spot Bitcoin ETF is an index fund that is based on the price of Bitcoin. Its working principle is The fund will actually hold Bitcoin as a collateral asset. Those who purchase the Spot Bitcoin ETF are considered partners or co-owners of the assets. And can be traded through the stock exchange. Spot Bitcoin ETF can therefore provide investors with the opportunity to access digital currency through the stock exchange or financial system that many people are familiar with.

The effects that may occur from Spot Bitcoin ETF

The advantage of the Spot Bitcoin ETF is that it may be able to help large investors or institutional investors who have not yet been exposed to the crypto market. to be more accessible This is because this group of investors may have been reluctant to enter the market. Whether for reasons such as legal ambiguity, regulation, or unfamiliarity with the new financial system, having a Spot Bitcoin ETF on a regulated exchange may help investors make the decision to enter the market more easily.

Looking at the short-term picture, the arrival of the Spot Bitcoin ETF appears to be a positive thing for the crypto market because the price of Bitcoin has been able to increase continuously since the news of the Blackrock fund's filing of the Spot Bitcoin ETF registration. Mid-June 2023

BlackRock's filing of the Spot Bitcoin ETF created excitement in the market because In addition to being one of the largest fund registrations in the United States, There are more than 4 trillion dollars worth of assets under care. The important thing is that it is an ETF that is based on the spot price of Bitcoin or directly on the current price of Bitcoin. This is because even though the SEC previously approved ETFs that are related to cryptocurrencies, Some Lieutenant Governors have already arrived. But most of them are funds that rely on futures prices or stock values ​​of companies that do crypto-related business.

It's not just BlackRock, but funds like Ark Investment Management and Grayscale have filed for similar listings. Some analysts therefore think that if the Spot Bitcoin ETF is approved, it could be a factor in bringing investors back into the crypto market and helping the market recover from the downturn.

Moreover, if Spot Bitcoin ETF is approved This could open the door for new crypto-related financial instruments, such as Ethereum ETFs that reference the price of ETH or even ETFs of other cryptocurrencies.

However, even in the short term it looks positive for the crypto market. But in the long run, we still cannot tell clearly. Because the factors that have led the SEC to avoid approving Spot Bitcoin ETFs have been concerns about price volatility and market manipulation, the SEC has conditioned Blockrock to implement a market surveillance system. which is strict in order to keep an eye on and protect against those with bad intentions

For this reason, it is still not possible to say whether the arrival of the Spot Bitcoin ETF will be more beneficial or harmful to the market in the long run, but it is certain that it will be a factor that will allow investors to access crypto. more And it may be a factor that causes the development of innovations or new financial instruments such as Ethereum ETF, etc.

conclude

The arrival of Spot Bitcoin ETFs could be a positive for the crypto market in the short term. because it makes large investors Easier access to markets and familiar surroundings It may also be a factor that helps push the creation of new financial instruments. More about crypto But in the long run, we still need to keep an eye on it. Because it is still unclear Crypto market volatility What effect will it have on large investors? Investing in the crypto market still requires appropriate risk management.

refer : Bitkub Blog, Forbes

Warning

*Cryptocurrencies and digital tokens carry a high level of risk. You may lose the entire investment amount. Please study and invest appropriately with your acceptable risk level.
**Digital assets are risky. Please study and invest appropriately with your acceptable risk level.
***Past returns of digital assets or past performance It is not a confirmation of the return. of digital assets or their future performance.”