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Bitcoin ETF Happens in the US, What’s Next for BTC

The approval of bitcoin exchange-traded funds (ETFs) in the US has come true. Various actors in the crypto space have tried to get the green light from that country’s regulator (SEC) in less than a decade.

Related Reading | Bitcoin ETF Receives SEC Approval, Marks Historic Day for Crypto

The market feels a sense of excitement with bitcoin, a major achievement for the crypto industry, reaching a 24-hour high of around $63,000. There has been some retracement since that peak, but at the time of writing, BTC price continues to trade north of $61,000.

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BTC with minor losses on the daily chart. Source: BTCUSD Tradingview

investment firm QCP Capital commented On BTC ETF approval. As reported by NewsBTC, the investment product will track the Chicago Mercantile Exchange (CME) bitcoin futures. Thus, some have argued that it would be a poorly performing product to benefit Wall Street and institutions. QCP Capital said:

The approval of bitcoin ETFs is a positive development. Whatever the case, a progressive move from the regulator bodes well for bitcoin and the cryptocurrency market at large.

Contrary to the opinion of those against bitcoin ETF approval, QCP Capital believes the product will “settle” “institutional” investors apart because of its features. Thus, the US retail sector could become the major player.

Related Reading | Bitcoin “Supertrend” Begins With Buy Signals On All Major Timeframes

The BTC ETF based on CME Futures will trade at a premium relative to the spot price of bitcoin. Therefore, institutional investors may have little incentive to trade this investment product only at the stage of buying the CME contract. QCP Capital said:

We’re not sure whether these futures-based ETFs will be able to pull out enough new money to trigger an exponential move, as we saw in Q4 2020.

As investors move from “Gold ETFs to Bitcoin”, the market could experience a new influx of capital expected from traders and operators. It remains to be seen whether the move will be able to sustain the rally.

After Bitcoin ETFs, Is Ethereum Next In Line?

In addition to the potential lack of sufficient inflows to maintain BTC’s current levels, operators have a price in bitcoin ETF approval, said QCP Capital. For the past two weeks there have been rumors that SEC Chairman Gary Gensler has pointed to this positive prospect.

This could contribute with a potential retracement and trigger a “buy rumour, sell news event”. In the future, QCP Capital expects to approve Ethereum ETFs with similar characteristics as CME offers ETH-based products. The firm said:

(…) This also means that until other coins have futures contracts, the US will be limited to bitcoin and ethereum ETFs only.

Other variables may be at play for changing market dynamics: an increase in CME BTC futures trading volume, a focus on other crypto-related issues, the firm said, an increase in bitcoin-based tools to generate yields.

However, one of the most important variables could be a potential drop in the Grayscale Bitcoin Trust (GBTC). A preferred tool among institutions for gaining BTC exposure, an ETF could render it obsolete. Thus, the crypto market may face some uncertainty.

Related Reading | Bitcoin Returns to $60K, What’s Different from New ATH?

As seen below, GBTC has been trading at a significant discount since March 2021. QCP Capital added the following:

What could be a possible acquisition and delisting for GBTC in the future. We are not sure what effect this might have on the market, but it would be worth keeping an eye on what happens to the largest private bitcoin treasury with 680,000 BTC.

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Source: slant via QCP Capital

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