Potential Advantages of Bitcoin ETF

  • January 9, 2024
  • Jennifer Moore
Potential Advantages of Bitcoin ETF

Bitcoin ETF is an investment vehicle that is traded like stocks but it also tracks the performance of an underlying asset or index. There are many advantages of Bitcoin ETF because it provides a way for investors to get exposure to underlying assets such as oil and gold. Most ETFs trade on a traditional stock exchange and their value will fluctuate. Crypto investors are waiting for approval from the US Securities and Exchange Commission (SEC). This may change the fate of Bitcoins forever. 

Potential Advantages of Bitcoin ETF After Approval

The potential advantages of Bitcoin have the potential to bring crucial changes in the cryptocurrency sector. Therefore, it will be helpful to briefly describe some of the impacts after the SEC approves Bitcoin ETF.

Changes in Supply and Demand of Bitcoin ETF

In the opinion of PWC, once the SEC approves Bitcoin ETF, then the global assets under management may increase by $115 trillion. Bitcoin’s accessibility on stock exchanges can lead to large market inflows. There is a high possibility that after approval, Bitcoin spot ETF will attract individual investors and encourage institutional oversight, thereby, leading to broader adoption.

Better Diversification

In any form of investment including crypto investments, experts favor diversification because it reduces the magnitude of risks. There is a high possibility that after the approval of Bitcoin ETF, investment portfolios may significantly diversify. Additionally, crypto ETFs can increase the exposure of cryptos before many potential investors.

Positive Impact on Bitcoin’s Prices

A spot ETF will help Bitcoin to gain more credibility among the people. Therefore, forecasts suggest that there will be a more positive impact on its prices. The limited supply of Bitcoin ETF may enable investors to gain more exposure and lead to a prolonged surge in prices. Some experts predict that the prices may remain in the range of $42,000 and $100,000, once ETF is approved. The reason behind such surges will largely be due to increased liquidity and accessibility. 

Enhance Security in Crypto Trading

Crypto trading without ETF approval is safe, but after approval may become safer. The major reason behind this change is that ETF does not need safe storage of keys. The crypto holder does not own the fund shares and does not own any cryptocurrency either. 

Convergence of Digital and Traditional Finance

Bitcoin ETF’s approval may play a pioneering role in converging traditional and digital finances. It allows investors to allocate digital assets through trusted financial institutions and boost the confidence of investors. Many regulated platforms offer immediate access to physical access to Bitcoin. Once the approval takes place, the investors will gain more exposure and it will be good for the digital asset industry. 

Improve Global Access to Bitcoins

Improving global access to Bitcoin is one of the biggest advantages of Bitcoin ETF. Spot Bitcoin ETFs have the potential to widen the digital asset’s base to a wider range of people. Moreover, it can also help asset managers to take a small position on Bitcoin, thereby, significantly changing the global financial landscape. Therefore, spot Bitcoin ETFs can lead to better management of crypto assets and this particular benefit is not limited to a few institutions. 

Also Read- PayBitoPro Provides its Crypto Broker Platform to a Singapore-Based Firm

Bottom Line

There is a lot of optimism among crypto enthusiasts regarding the approval of the Bitcoin ETF. The potential advantages of Bitcoin ETF undoubtedly outweigh the disadvantages. The approval of the spot Bitcoin ETF will represent a radical shift in the mindset of many governments and central bank authorities. This move can indeed be a historic one in the history of cryptocurrencies because it can increase its global acceptance and liquidity considerably. 

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