Bitcoin ETF Check, What’s Next For BTC
October 16 2021 - 2:00PM
NEWSBTC
The approval of a Bitcoin Exchange Traded Fund (ETF) in the U.S.
has come true. Different actors in the crypto space have tried to
receive the greenlight from that country’s regulator (SEC) for
little less than a decade. Related Reading | Bitcoin ETF
Receives Approval from SEC, Marking Historic Day for Crypto Major
achievement for the crypto industry, there is a sensation of
euphoria in the market with Bitcoin reaching a 24-hour high of
around $63,000. There has been some retracement since that peak,
but BTC’s price continues to trade north of $61,000, at the time of
writing. Investment firm QCP Capital commented on the BTC ETF
approval. As reported by NewsBTC, the investment products will
track the Chicago Mercantile Exchange (CME) Bitcoin futures. Thus,
some have argued that it’ll be a poorly execute product to benefit
Wall Street and institutions. QCP Capital said: The approval of a
Bitcoin ETF is a positive development. Whatever the case may be, a
progressive step from the regulator is good for Bitcoin and the
cryptocurrency market at large. Opposite to the opinion of those
against the Bitcoin ETF approval, QCP Capital believes this product
will “sideline institutional” investors due to its characteristics.
Thus, the U.S. retail sector could become the predominant player.
Related Reading | Bitcoin “Supertrend” Begins As Buy Signals
Stack On All Major Timeframes A BTC ETF based on CME futures will
most likely trade at a premium related to Bitcoin’s spot price.
Therefore, institutional investors could have little incentive to
trade this investment product in step of simply buying CME
contracts. QCP Capital said: We are not sure if these
futures-based ETFs will be able to draw enough new money to trigger
an exponential move higher like the one we saw in Q4 2020. The
market could experience a new inflow of capital, as expected from
traders and operators, as investors move “out of Gold ETFs into
Bitcoin”. It remains to be seen if this move will be able to
sustain a rally. After The Bitcoin ETF, Is Ethereum Next In Line?
In addition to the potential lack of sufficient flows to hold BTC’s
current levels, operators seem to have price in the Bitcoin ETF
approval, QCP Capital added. There have been rumors going around
for the past two weeks with the SEC Chair himself Gary Gensler
hinting at this positive possibility. This could contribute with a
potential retracement and trigger a “buy the rumor, sell the news
event”. In the future, QCP Capital expects an Ethereum ETF with
similar characteristics to be approved as the CME offers ETH based
products. The firm said: (…) this also means that until other coins
have a futures contract, the US will only be limited to Bitcoin and
Ethereum ETFs for the time being. Other variables might come in to
play to change market dynamics: a growth in CME BTC futures trading
volume, a focus on other crypto related issues, the firm said, the
increase in Bitcoin based instruments to generate yield. However,
one of the most important variables might be the potential decline
in the Grayscale Bitcoin Trust (GBTC). A favorite tool amongst
institutions to gain BTC exposure, an ETF could render it obsolete.
Thus, the crypto market could face some uncertainty. Related
Reading | Bitcoin Returns To $60K, What’s Holding Off From New
ATHs? As seen below, the GBTC has been trading at an important
discount since March 2021. QCP Capital added the following: What
could happen for GBTC in the future is a possible takeover and
delisting. We are not sure what market impact this might have but
it would be worth keeping an eye on what happens with the largest
private Bitcoins treasury with 680,000 BTC.
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