How would the financial world change with a Bitcoin ETF?

Not only are crypto investors watching to see if the US SEC approves a Bitcoin Spot ETF on January 10th, but global investors in traditional assets are also watching. too Because the arrival of Bitcoin ETF will bring about important changes in the financial world. Since the advent of gold ETFs almost 20 years ago,

The main change is that Bitcoin will no longer become a common investment asset that is accessible to everyone without legal or technological restrictions. Whether it is retail investors around the world, including Independent financial planners or IFAs can recommend this asset for their clients' portfolios. Even if those clients don't understand Bitcoin, it is up to financial planners to allocate their portfolios to clients investing indirectly through ETFs.

While institutional investors, whether hedge funds or private companies will be able to invest in Bitcoin, where the money of institutional investors around the world is enormous compared to the size of the entire crypto market. Including one of the world's largest investors such as pension funds or various retirement funds. will have access to Bitcoin. This group of investors is large and invests for the long term. Even with a low risk tolerance, a split of just 1% is considered enough to push up Bitcoin's price.

And if Bitcoin gains wider acceptance, it's also possible that two of the world's largest institutional investors might consider allocating some of their funds to it as well, such as sovereign wealth funds , which represent the largest amount of investment capital allocated by each country from its national reserves to various assets.

While Bitcoin's intended destination is likely to be some national central banks turning to holding some Bitcoin as international reserves like gold. As of now, only El Salvador has started investing in Bitcoin as part of its international reserves. In the future, there may be countries with weak financial systems turning to Bitcoin as international reserves as well.

It can be said that the emergence of a Bitcoin ETF will be an important turning point for Bitcoin from being a speculative commodity for retail investors to becoming one of the assets that investors around the world place on a par with stocks, gold, real estate, etc.

Having institutional investors join the Bitcoin ETF will also make the price more stable because institutional investors will focus on long-term investment rather than short-term. We may not see Bitcoin's sharp swings or corrections like in the past.

At the same time, we will not see a rapid upturn generating returns at multiples as in the past either. Because the presence of institutional investors will cause Bitcoin's growth rate to begin to be limited, unlike in the initial period where it was not difficult to generate returns of hundreds of times.

The author believes that even on January 10, 2024, the US SEC may not yet approve Bitcoin ETFs, but they can still approve them in the next round. Either way, a Bitcoin ETF is possible and could be a turning point for the financial world ten years from now.