The approval of a Bitcoin Exchange Traded Fund (ETF) in the U.S. has actually come to life. Different actors in the crypto space have tried to receive the greenlight from that country’s regulator (SEC) for little less than a decade.
Major accomplishment for the crypto market, there is an experience of bliss 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 company 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 actually argued that it’ll be an improperly carry out item to advantage Wall Street and organizations. QCP Capital stated:
The approval of a Bitcoin ETF is a positive development. Whatever the case might be, a progressive action from the regulator benefits Bitcoin and the cryptocurrency market at big.
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.
A BTC ETF based upon CME futures will more than likely trade at a premium associated to Bitcoin’s area cost. 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 exactly sure if these futures-based ETFs will have the ability to draw enough brand-new cash to activate a rapid relocation 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 stays to be seen if this relocation will have the ability 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 actually been reports walking around for the previous 2 weeks with the SEC Chair himself Gary Gensler meaning this favorable possibility.
This could contribute with a potential retracement and trigger a “buy the rumor, sell the news event”. In the future, QCP Capital anticipates an Ethereum ETF with comparable attributes to be authorized as the CME provides ETH based items. The company stated:
(…) 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 may be available in to play to alter market characteristics: a development in CME BTC futures trading volume, a concentrate on other crypto associated concerns, the company stated, the boost in Bitcoin based instruments to create yield.
However, one of the most important variables might be the potential decline in the Grayscale Bitcoin Trust (GBTC). A preferred tool among organizations to acquire BTC direct exposure, an ETF might render it outdated. Thus, the crypto market might deal with some unpredictability.
As seen below, the GBTC has been trading at an important discount since March 2021. QCP Capital added the following:
What might take place 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.
