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Reasons To Look Forward To Spot Bitcoin ETF Approvals In The US

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2024-01-03
Reasons To Look Forward To Spot Bitcoin ETF Approvals In The US

You're probably overwhelmed with the term ETFs and may even think things like 'gosh another ETF nonsense' - yes we hear you and we understand. Consider this your one and only guide to the spot Bitcoin ETFs hype; this will be short and sweet, you have our words.

Hype, Anticipation, Hopium - All The Same

We already have a few spot Bitcoin ETFs approved in other jurisdictions: six in Canada, with the biggest one being Purpose Bitcoin ETF (BTCC), five in Jersey, three in Guernsey, two in Germany/Switzerland/Brazil, one in Liechtenstein/Australia. That is four countries from the G20 and four tax havens. Should another spot Bitcoin ETF approved in the U.S., Bitcoin prices will most likely soar because:

(1) It means at least US$10 billion will be pouring into Bitcoin - the flagship cryptocurrency of crypto with a dominance of 40%++ in this space. We are talking financial giants, pension funds, and even companies who will soon consider adding Bitcoin (via spot Bitcoin ETFs) to their 401(k) plans;

(2) One major financial market finally recognises Bitcoin as part of the mainstream financial system;

(3) One more step towards clearer crypto regulation in the U.S., a major jurisdiction.

The direct impact of number (1) is greater trading volume, which will lead to better liquidity, stabler prices and eventually the determination of Bitcoin's fair value. Meanwhile, we can expect boosted confidence for both institutional and individual investors with (2) and (3). Of course, it'll result in more capital flowing into Bitcoin and the crypto market in general; please return to the impact of number (1) to see what this means.

Now you get why 'spot Bitcoin ETFs' have been the talk of the town from 2023 going into new year 2024.

If You Are An Individual Crypto Investor

Even if you are an individual crypto investor that is not U.S.-based, all three points mentioned above will still serve you in short-, mid- and long-term. With the likelihood of an ETF approval as early as next week, and the fourth Bitcoin halving in April on top of that, we have every reason to bet on a Bitcoin price breakout. Just one year ago, we were doomed with US$16K Bitcoin - now we're already crossed US$45K. Nearly 200% in one year? Not one TradFi asset can offer a number close to it.

Don't forget that Bitcoin has a limited supply. And so in mid- and long-term's worst case scenario where prices begin to stabilise and stricter regulations are coming, it's still possible that Bitcoin's fair value will end up well above US$50K. Where is our less-than-US$50K-Bitcoin gang?

The excitement around spot Bitcoin ETF approvals in the U.S. brings about golden opportunities for institutions and individuals alike, regardless of their location and capital availability. We could be wary of the risks stemming from Bitcoin's high volatility even after all of this, but remember that when the news drops, 'big' and 'smart' money will share those risks with us as well, meaning this ship can't and won't sink. That in and of itself is enough for a big celebration!

Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.