Crypto News – The cryptocurrency market will get billions of dollars in institutional money if the first spot Bitcoin exchange-traded funds (ETF) are approved in the US.
Spot Bitcoin ETF and Retail Investors: Should Retail Investors Be Concerned About ETF Approvals?
Public trading data indicate that on the first day of trading on January 11, 2024, the total volume across the 10 authorized spot Bitcoin ETFs exceeded $4.5 billion. Only the Bitcoin ETF offered by Grayscale Investments is said to have handled more than $2 billion in trade. Given the expected significant inflow of institutional capital in the Bitcoin space, it is unclear whether small investors should be worried about the possible impact of a spot Bitcoin ETF or, on the contrary, be relieved.
Analysts Express Many Different Views on ETFs
Opinions among industry executives and experts are divided. Some think an ETF of this kind would be a fantastic way for non-institutional investors to get started. On the other hand, some believe that ETFs are unsuitable for retail investing. They ought to continue holding Bitcoin in their own possession with self-custody instead. A spot BTC ETF, in the words of Bitwise Chief Investment Officer Matt Hougan, would make the “Bitcoin market efficient” by bringing down the cost of accessing Bitcoin.
A spot Bitcoin ETF is strictly good for retail investors,
Even if you never plan to use the ETF, its existence will likely make it cheaper for people to acquire Bitcoin through other means, causing brokerage commissions to go down, etc.
Hougan
On the other hand, Leah Wald, co-founder and CEO of Valkyrie, emphasized that individual investors should approach ETFs cautiously.
While it offers a convenient way to invest in Bitcoin without dealing with the complexities of self-custody, it also introduces the typical counterparty risks associated with all ETFs,
If you are someone who wants to self-custody, then spot Bitcoin ETFs may not be for you. If you’re looking for easy access to a highly transparent, institutional-grade fund to potentially capitalize on the price movement of Bitcoin, then an ETF could be a great solution,
Wald
Leave a comment