Bitcoin ETF Approval Would Introduce Up To US$300m of Institutional Capital
A lot of people are keeping a very close eye on whether or not there will be a bitcoin ETF in the near future. The SEC will have a tough decision to make very soon, yet it remains anybody’s guess as to how things will evolve in the near future. A lot of Wall Street professionals are skeptical when it comes to seeing this ETF approved by the SEC anytime soon, though.
What Does The Future Hold For The Bitcoin ETF Scene?
Wall Street is a very odd place to be right now. On the one hand, a lot of traders and investors are genuinely worried about the economic instability affecting the global financial sector. On the other hand, there is also the possibility of the first-ever bitcoin ETF to be approved by the SEC. This latter part has a lot of people concerned for different reasons. It is rather interesting to watch these experts squirm a bit when it comes to the bitcoin ETF right now.
Prominent lawyers and Wall Street analysts remain skeptical about the chances of seeing such an ETF get approval, though. Bitcoin enthusiasts and experts are very confident there is no way the SEC won’t approve this new trading vehicle, which would send even more shockwaves through the brittle financial ecosystem we live in right now.
Due to bitcoin having seen a rather stellar 2016, the demand for cryptocurrency has been growing as well. However, most investors are not keen on buying bitcoin through an exchange directly, which is where intermediate trading vehicles come into the picture. At the same time, the premium for shares of various Bitcoin trusts is shrinking, as the cryptocurrency’s value continues to go up. Just a few months ago, the Grayscale Bitcoin Trust premium was 42.41%, which has now dropped to 13%.
BitMEX, a very popular bitcoin futures exchange, recently launched a futures contract allowing investors to bet on the Bitcoin ETF approval odds. Right now, it would appear 33% of contract holders think it will be approved by the SEC, which still appears to be somewhat negative. However, that 33% is still a lot higher than virtually everywhere else one talks about this bitcoin ETF.
Should the Bitcoin ETF get approved, it is expected close to US$300m of fresh institutional capital will enter the bitcoin ecosystem during the first week. That would be quite a significant amount of fresh capital. It is expected that would send the value of BTC skyrocketing to a new all-time high. A lot of investors resort to a more cautious approach for now, which is to be expected. However, things continue to look positive for bitcoin as a whole.
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