Editorial & Advertiser disclosure

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Investing

Bitcoin ETFs – Everything you need to know

Published by Jessica Weisman-Pitts

Posted on October 22, 2024

Featured image for article about Investing

Bitcoin exchange-traded funds launched in the United States in January 2024. Experts believe in the consequent positive influence on BTC and the entire crypto industry. The main implication is that ETFs should attract traditional investors who avoided investing in crypto so far. Those who already have experience mainly buy Litecoin, Bitcoin or any other cryptocurrency on Paybis that suits their portfolio.

It took about a decade for BTC ETFs to start trading in the United States. We can trace the first Bitcoin ETF application back to 2013. The founders of the Gemini exchange, Tyler and Cameron Winklevoss, tried to get approval from the SEC to launch a Bitcoin ETH.

2017. Winklevoss’ brothers established a Bitcoin Investment Trust, hoping they could transform it into an ETF. The SEC didn’t think the market was ready, so they rejected the application. The response from Winklevoss was that it’s the regulatory environment that should develop to follow new trends.
2018. Another application was rejected by the SEC. The new explanation is that a crypto exchange wouldn’t be capable of stopping manipulation.

Source: Pixabay

Before you check the most popular crypto ETFs and pick your favorite, it’s important to understand how they work. A spot exchange-traded fund that monitors and aims to mimic the performance of an underlying asset.

The ETF manager analyzes the number of Bitcoins held and issues the number of shares on a conventional stock exchange accordingly. Users have the opportunity to purchase stocks. The price per share is adjusted depending on the Bitcoin’s current market worth.

That’s a much easier approach than acquiring BTC coins. You would need to get a digital wallet, register an exchange account (or visit a decentralized exchange), and execute the purchase. It’s also necessary to deal with private keys to ensure your funds remain safe. Many investors find this complicated, and the regulation may deter institutional investors from the crypto market. Spot Bitcoin ETFs are the ideal alternative for individuals and institutions who don’t want to do business with the crypto industry directly but would still like a way to invest in BTC.

Bitcoin ETFs have made an impact on the crypto industry even before they became available for trading. According to reports, BTC had a 20% price increase in less than two weeks following the announcement that BlackRock plans to apply for a Bitcoin ETF. The company had over 99.5% of its ETFs approved, which didn’t go under the radar of many crypto investors.

Bitcoin and other digital assets also benefit from increased reputation and trustworthiness as a result of approving ETFs. It shows the regulators confirm that BTC is a viable investment and believe that relevant parties can prevent market manipulation and other illicit activities.

It’s not only Bitcoin that got its exchange-traded funds. You can already trade Ethereum ETFs, and there’s a good chance other cryptos will join soon. It could take some time for traders to test these ETFs and make them a part of their portfolios. Eventually, we will see more investors using this trading option. And more traders equal more capital for the crypto industry.