Future of Bitcoin ETF
Is the Future of Bitcoin in ETF?
We live in a blockchain technology development era. But even years after the creation of Bitcoin, we still blaze our trails like a mole. New technologies are always scary, but there’s no escaping them. The smart and practical way of dealing with changes is to adapt to them.
The crypto and blockchain world has a lot to offer us. Every day we come across new ideas and new approaches related to crypto. Some people thought that the invention of Bitcoin and Etherium was the best it could get. But today it’s all improving Bitcoin and Blockchain technologies. Almost every day, we hear about a new project idea, new ICO, or new technology working with blockchain. Almost every day we hear about an idea proposed to implement blockchain in a technology that has been around for a while. These ideas help to improve the infrastructure we have, our financial and banking systems.
One of the ideas I want to talk about today is implementing Bitcoin in ETF.
What is ETF?
ETF stands for Exchange Traded Fund. To put it simply, ETF is a security measure tracing an index, a commodity, bonds or a basket of assets. In other words, it’s a collection of different securities. ETF’s price depends on the index, commodity, or assets that it traces. Its’ price can vary through the day, as it is being sold and bought.
What’s the difference between ETF and a regular Futures and shares?
- ETF is a fund. It’s not just a singular share, it’s a portfolio of shares.It is being created by the professional members of the market.
- Investors don’t have to pay for the administration of a Portfolio.
- ETFs are high in liquidity.
- ETFs have lower fees than mutual fund shared
All this, and some more, serves to make ETF an attractive alternative for individual investors.
Some people say that a bitcoin ETF is practically the antithesis of what bitcoin’s main idea is supposed to be. Some people (mainly investors) hold their breaths to hear the news about Bitcoin ETF being approved. But meanwhile, we have only seen few denied Bitcoin ETFs and opinions from several Crypto experts.
What are the thoughts of experts on Bitcoin ETF?
Bitcoin ETF has gained popularity, because of the high expectations from the Crypto community. Legend says that Bitcoin ETF has the potential to attract a massive exposure of large capitals in the Crypto world.
Some say that history will repeat itself. We have seen how the Gold ETF has transformed the market and now we’re hoping to see Bitcoin do the same magic. Once ETF becomes available for a market, the price of a Commodity (in this case Bitcoin) rises up enormously. On March 28, 2003, the first Gold ETF was launched and the interest in gold started rising. But the thing is, these markets are controlled and manipulated, that crosses out the idea of Bitcoin and the independence of our financial possibilities.
Many experts argue whether Bitcoin ETFs are a good idea or not. On Aug 14, 2018, Andreas Antonopoulos published a Video about it on his Youtube Channel. In this video, he answers several questions regarding Bitcoin ETF and voices his opinion on the changes in the Bitcoin environment.
Andreas says in his video, that he thinks the Bitcoin ETF will be approved by the SEC (The U.S. Securities and Exchange Commission), but — according to him — it’s a terrible idea.
“The idea here is to take a reserve of Bitcoin and then make them tradable instruments that can be traded on markets like stocks,” says Andreas. But, in this situation “Custodial holds the actual Bitcoin in and what you’re getting is a share in their funds — not Bitcoin”. This way, traditional investors will be able to influence the price of Bitcoin. Andreas says that these markets are heavily manipulated and that Bitcoin ETF will damage its ecosystem.
“ETFs fundamentally violate the underlying principle of P2P money, where each user is not operating through a custodian, but has direct control of their money, because they have a direct control of their keys,” says Andreas. To summarize the whole video “Your keys? Your BTC! Not your keys? Not your BTC” this is what Andreas has to say about Bitcoin ETF.
Another opinion about Bitcoin ETF comes from the founder of Netcoin, Michael Vogel. He thinks that Bitcoin ETF is an interesting idea, but not crucial and obligatory for Bitcoin’s long-term success.
Experts and non-experts have been talking about it and there are several different opinions and different point of views. Some say that Bitcoin and the crypto markets do not need an ETF to be great. Agreeing on Andreas’ opinion, saying ETF to be an antithesis of Bitcoin’s original purpose. Like every coin has two sides, this matter has supporters and opposing sides. Stating that crypto really (really) wants a Bitcoin ETF, this article concentrates on the demand and adaptation of Bitcoin to ETF.
Now, it turns out that Bitcoin ETFs has many supporters. Some say that it’s how life works. “Adapt or die. Approve Bitcoin ETF and take the leading step for advancing the human race through the revolutionary technology we have been gifted” is one of the sought comments on the SEC for the latest effort to get an exchange-traded fund tied to bitcoin.
Alena Vranova, the founder of Trezor and business strategy advisor for crypto companies, also speaks about Bitcoin ETF with speculation, stating that Bitcoin ETF is definitely not a necessary tool for Bitcoin development. On the other hand, it could be a possibility to open the door of the Crypto world for so many new investors. She thinks that Bitcoin ETF predictions are a signal for holders. She states that implementing Bitcoin ETFs can help the price of BTC to become more stable and skyrocket in a very short time.
Mostly, experts agree that Bitcoin ETF is not necessary for Bitcoin’s future. Some of them talk about the negative side effects of Bitcoin ETF, some experts believe that ETF can actually save or benefit Bitcoin and its investors.
Vitalik Buterin, on the other hand, talks about how much emphasis is placed on Bitcoin ETF. On July 29, 2018, he posted a tweet, saying “I think there’s too much emphasis on BTC/ETH/whatever ETFs and not enough emphasis on making it easier for people to buy $5 to $100 in cryptocurrency via cards at corner stores. The former is better for pumping price, but the latter is much better for actual adoption”. I think that Vitalik is a Bitcoin ETF supporter, more or less. He thinks that ETF could help BTC balance the price (and grow it), plus, helping first-time investors and newbie crypto lovers to make small time investments.
In the end, all we can do is wait and see how things turn out. As several experts have pointed out, there’s probably no escaping from Bitcoin ETFs. Things are changing and they’re changing fast. What was an unimaginable technology a few years ago, today is the number one discussed subject. We see innovations every day and we hope they’ll be prosperous for us. It seems like the future holds a place for Bitcoin ETFs, all we have to do is to kick back, relax and wait for future events to occur.