Many factors are moving the price of Bitcoin and other cryptocurrencies such as Ethereum and Ripple. Real-world usage, regulation, hacks, scaling, transaction times, transaction costs, and you name it. However, one specific question has come to dominate the scene: will a Bitcoin ETF be approved?
1) What is an ETF?
An exchange-traded fund (ETF) is an investment fund that specializes in a specific market, usually an index on a stock exchange. It allows investors to gain straightforward exposure to a specific index directly without buying the underlying assets. An S&P 500 ETF rises and falls with the S&P 500 index without having to buy all 500 stocks in the correct proportions. A Crypto ETF would also allow smooth exposure to an index of specific cryptocurrencies without having to deal with the hassle of buying the exact amounts of Bitcoin, Ethereum, Ripple, etc. in the correct numbers.
2) Why do crypto-traders care?
An ETF would make investing in cryptocurrencies far easier to institutional and retail investors alike. It would save the trouble of setting up a wallet, learning the topic, choosing an exchange, etc. It would be as easy as buying an S&P 500 or a Dow Jones ETF. Also, if the Securities and Exchange Commission (SEC) approves such an investment fund, it would also serve as a seal of approval for cryptocurrencies, first and foremost for Bitcoin.
3) What has happened so far with Bitcoin ETF’s?
In short, all requests were rejected. The first ETF proposal dates back to 2013 and was denied in March 2017. It came from the Winklevoss brothers, more known for their early encounters with Facebook’s Mark Zuckerberg. A second rejection of the Winklevoss brothers’ request came in July 2018. Other applications have also been denied for various reasons.
4) What is the state of Bitcoin ETF requests now?
There are around a dozen Bitcoin ETF requests and one more generic Crypto ETF request. Two stand out.
