Bitcoin ETF Approved: Now What?
Yesterday afternoon, after early week drama and a hacked twitter account, history was made on Wall Street. The spot Bitcoin ETF, the most anticipated exchange-traded fund (ETF) in history, or in this case, batch of ETFs, was finally approved by the U.S Securities and Exchange Commission (SEC) after a multi-year wait and several legal battles. A Bitcoin spot ETF is a financial product that tracks the price of Bitcoin directly by holding the cryptocurrency itself rather than futures of derivative contracts. This type of ETF allows investors to gain exposure to Bitcoin’s price movements without actually owning the digital asset. By trading on traditional stock exchanges, a Bitcoin spot ETF provides a regulated and accessible way for investors to participate in the crypto market without the complexities of directly managing digital wallets or trading cryptocurrency exchanges.
Below are 5 things to watch post-approval:
Did the ETF Flows Exceed Expectations?
As Spot Bitcoin ETF trading goes live Thursday, investors should track the ETF volumes to see if the interest is as real as the hype. The key ETF to monitor is BlackRock’s (BLK) IBIT spot Bitcoin ETF. BlackRock is the world’s largest asset manager and currently holds the all-time day-one flow and volume record for an IPO. Can its shiny new Bitcoin ETF break its previous record? Stay tuned.
Is Generational Adoption Coming?
Because Bitcoin’s meteoric rise was due to a grassroots movement by mostly younger people, the question now becomes whether or not older generations will begin to adopt Bitcoin through traditional means (like through a financial advisor). Though it is too early to tell, a recent survey of financial advisors suggests that adoption will take place – in a meaningful way. Here are three shocking facts:
To answer this question, here are three shocking facts from a recent survey:
· Only 39% of financial advisors believe a spot Bitcoin ETF will be approved in 2024.
· 88% of advisors interested in purchasing Bitcoin are waiting until after a spot ETF is approved.
· Only 19% said they are able to currently buy in client accounts.
Expect Volatility
Whenever such a game-changing announcement is made on Wall Street, volatility is bound to rear its ugly head. Higher volatility means larger price fluctuations, reflecting greater uncertainty and risk. To combat volatility traders can trade smaller or wait until the storm passes.
Price and Volume Action is King
When Coinbase (COIN), the largest crypto exchange in the U.S, went public in 2021, it marked the cycle top in Bitcoin. Will the Bitcoin ETF news be another “Buy the rumor, sell the news” event? The best way to answer this question is to size up a chart of Bitcoin because a chart represents actual supply and demand. Currently, the Bitcoin chart is in a strong uptrend and is breaking out of a bullish consolidation. In other words, this time may be different.
Image Source: TradingView
Investors should also watch the price and volume action in bitcoin proxies such as miners like Marathon Digital (MARA), Riot Platforms (RIOT), Bitfarms (BITF), and Hut8 (HUT).
Is an Ethereum ETF coming?
Yesterday’s action once again proved that the market is the master manipulator. While all eyes were on Bitcoin, Ethereum outperformed and rose 10%. Are investors anticipating an ETH ETF in the future?
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BlackRock, Inc. (BLK) : Free Stock Analysis Report
Marathon Digital Holdings, Inc. (MARA) : Free Stock Analysis Report
Riot Platforms, Inc. (RIOT) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
Hut 8 Corp. (HUT) : Free Stock Analysis Report
Bitfarms Ltd. (BITF) : Free Stock Analysis Report
