SoSo Value: Three Questions and Answers about Bitcoin ETF
Recently, whether the Bitcoin ETF can be approved and whether it can be approved on time has captured the attention of everyone in the crypto market. But what does the approval of the ETF actually mean, and what impact does it have on crypto investors and traditional investors respectively? How can ordinary users participate in the ETF? If we want to track the progress of the ETF, what information should we pay attention to? Soso Value addresses these questions with three questions and three answers, guiding everyone to explore the "true nature" of the ETF.? What impact will the approval of Bitcoin ETFs have on the market?
?️ - First, it will make it easier for traditional investors and institutions to enter the cryptocurrency market, as they can invest through familiar trading platforms and brokers without directly interacting with cryptocurrency exchanges. This convenience is expected to attract more capital into the crypto market, promoting its development and maturity. Standard Chartered Bank predicts that by the end of this year, $100 billion will flow into Bitcoin ETFs, while Bloomberg ETF analysts estimate that inflows into Bitcoin ETFs are expected to reach $15 billion, with AUM inflows reaching $50 billion.
In addition, Bitcoin spot ETFs will enhance the liquidity and price discovery mechanisms of the crypto market. The emergence of Bitcoin spot ETFs will bring higher liquidity to the Bitcoin market, increasing trading volume and activity. At the same time, since the trading price of ETFs is usually based on the net asset value of the underlying assets, this will help to more accurately reflect the supply and demand dynamics of the Bitcoin market.
The launch of Bitcoin spot ETFs will also provide investors with more investment options and diversified strategies, allowing them to choose suitable investment strategies based on their risk preferences and investment goals.
However, the launch of Bitcoin spot ETFs also faces regulatory and compliance issues. Additionally, due to the volatility of the Bitcoin market, Bitcoin spot ETFs may encounter issues of price premiums or discounts, posing risks and uncertainties for investors. For example, Reginald M. Browne, a former ETF market maker, stated in a Bloomberg TV interview that Bitcoin ETFs could trade at an 8% premium to net asset value in the early stages.
https://x.com/JSeyff/status/1744423723250119104
? How can ordinary users participate in ETFs?
?️ First, let’s quickly recognize some of the major institutions currently involved in Bitcoin ETF applications:
Ark Invest: Previously invested in cryptocurrency exchange Coinbase, Bitcoin trust Grayscale, and payment processor Square. Ark Invest has partnered with Swiss ETF provider 21Shares AG to propose the ARK 21Shares Bitcoin ETF application.
Fidelity: Managing approximately $11 trillion in assets, Fidelity has submitted the ETF application for the Wise Origin Bitcoin Trust. The company's digital asset services department is responsible for custodial services for the trust's Bitcoin.
Bitwise Asset Management: Bitwise is known for managing the world's largest cryptocurrency index fund and has previously submitted the Bitwise Bitcoin ETP Trust application to the SEC.
Galaxy Digital: A diversified financial services and investment management innovator in the digital asset, cryptocurrency, and blockchain technology sectors. They have submitted the Invesco Galaxy Bitcoin ETF application in partnership with Invesco.
WisdomTree: An asset management company and ETF sponsor known for its innovations in the ETF space. Before applying for a Bitcoin ETF in the U.S., WisdomTree successfully launched a Bitcoin ETF in the Swiss market.
Valkyrie: As a newer asset management company, Valkyrie submitted its Bitcoin ETF application in January 2021. The company's ETF is planned to trade on the NYSE Arca.
Grayscale: Known for its Bitcoin trust (GBTC), Grayscale has been a major player in the cryptocurrency investment space and has announced its commitment to converting GBTC into an ETF.
BlackRock: The world's largest asset management company, BlackRock, has submitted an application for a Bitcoin spot ETF, proposing Coinbase as the cryptocurrency custodian and market data provider. BlackRock's ETF application has the support of former Barclays CEO Bob Diamond.
VanEck: One of the earliest applicants for a BTC ETF, VanEck launched the VanEck SolidX Bitcoin Trust in collaboration with Solid back in 2018. Although this application was withdrawn in 2019, VanEck has since attempted to launch a BTC ETF again.
Image source: https://x.com/JSeyff/status/1744356649068830730
?️ Ordinary users can participate in Bitcoin ETFs in the following ways:
Purchase ETF shares: Users can open a securities account with a brokerage firm, most of which offer online registration and account management services. After the ETF is approved, users can subscribe to ETFs through overseas brokers or directly purchase ETF shares in the secondary market.
Directly buy BTC to share in the market increment brought by ETFs: Users can directly purchase Bitcoin on cryptocurrency exchanges such as Coinbase and Binance. The launch of Bitcoin ETFs may impact the overall market, and users can share in this market increment by holding Bitcoin. Bitcoin prices can be checked on platforms like Coingecko and SoSo Value, and users should stay updated with relevant news.
Futures trading: Bitcoin futures are standardized contracts that buy and sell Bitcoin at a predetermined price on a specified future date. This method allows investors to trade with leverage, suitable for those looking to profit from predictions about Bitcoin price movements, and is often used for hedging risks.
Options trading: Bitcoin options are contracts that give the buyer the right (but not the obligation) to buy or sell Bitcoin at a specific price on a specific date in the future. Options trading is divided into "call options" and "put options." The main advantage of options trading is limited risk, as the maximum loss for investors is limited to the premium paid for the options. If the market moves in the direction of the options contract, investors can achieve higher returns. Investors can also hold spot Bitcoin while selling call options, which is a robust arbitrage strategy. This way, investors can generate additional income by selling options while maintaining the long-term appreciation of Bitcoin, thus hedging some downside risks.
Continuously monitor market dynamics and trade spot: After investing in Bitcoin ETFs, users should continuously monitor market dynamics, ETF performance, and related financial news and reports to make informed investment decisions. Continuous inflow and outflow information related to ETFs can be tracked in real-time on professional information platforms. For example, Soso Value is tracking and aggregating the latest institutional dynamics regarding ETFs on Twitter, including inflows, outflows, and news aggregation. Users can check the ETF section on the website https://alpha.sosovalue.xyz.
? What information should be monitored to track ETF progress?
Announcements and decisions from the U.S. SEC, as well as the application documents from institutions. Link: https://www.sec.gov/cgi-bin/browse-edgar?company=\&CIK=\&type=s-1\&owner=include\&count=40\&action=getcurrent
Official announcements from applying institutions: Institutions like Ark Invest, Fidelity, and Bitwise may publish relevant updates on their official websites or through press releases regarding their Bitcoin ETF applications.
Professional financial analysts and commentators: Following social media accounts or blogs of experts and analysts in these fields can provide in-depth analysis and insights. Soso Value is tracking and aggregating the latest opinions on ETFs from Twitter and overseas research institutions, and users can check the Institution section on the website https://alpha.sosovalue.xyz.
Financial news and media reports: Financial news websites, cryptocurrency specialized media, and mainstream news organizations typically report on the progress of Bitcoin ETF applications. For example, Soso Value is tracking and aggregating news related to Bitcoin ETFs in real-time, and users can check the News section on the website https://alpha.sosovalue.xyz to better understand the latest developments regarding Bitcoin ETFs.
