Bitcoin is catching up with gold as fast as it can get. According to Michael Saylor, CEO of MicroStrategy, Bitcoin is expected to replace all gold funds on the exchange over the next two to three years. It will also position itself as the leading asset index in the Western market and eventually replace the SPDR S&P 500 ETF Trust (SPY). Which is a more than $ 425,000 million mutual fund that tracks the S&P 500 stock index.
âTo achieve this, you need a spot Bitcoin ETF,â said Saylor, who has invested a large portion of his company’s capital in cryptocurrency. “Once these spot ETFs hit the market, I think they’ll see billions, then tens of billions, then hundreds of billions, then billions of dollars pour into them.” Saylor added.
Likewise, these spot ETFs would hold the underlying Bitcoin and serve as an institutional gateway for investors who want direct exposure. Saylor added.
At the time of writing this article, the price of Bitcoin stands at $ 62,000 and has a market cap of $ 1,172,965,000,000. Source: CoinMarketCap
Forward ETFs vs Spot ETFs
Two Bitcoin futures ETFs started trading in October. The first to hit the market was the ProShares Bitcoin Strategy ETF âBITOâ. Which amassed over $ 1 billion in assets in just days after launch. While the second, Valkyrie’s Bitcoin Strategy ETF, had a not-so-popular reception, but with high expectations. These ETF launches have generated a lot of excitement due to Wall Street’s acceptance of cryptocurrencies. And they have helped steer the market towards new applications for similar products.
âBitcoin futures ETFs are lower offerings, but they are the best institutional investors institutional investors can get right now,â Saylor said.
âObviously, the right answer is to allow investors to spend billions of dollars on Bitcoin through a spot ETF, as cash ETFs connect to the existing security structure, existing major brokers, collateral packages. existing. “
Nic Carter, partner of Castle Island Ventures and co-founder of Coin Metrics, agrees that Bitcoin futures ETFs are “inferior.” According to Carter, a spot Bitcoin ETF would be “the most popular commodity ETF launch of all time, possibly attracting more than $ 100 billion in assets in less than a month.”
Spot Bitcoin ETFs are already traded in other countries, including Canada. âThey work really well,â Carter said. “There is no explanation for the resistance at the upper levels here to approve this spot ETF, which obviously should exist and would make life enormously easier for all kinds of different investors.”
Recently, US regulators denied Bitcoin ETF requests
Since the launch of the two Bitcoin futures ETFs, investors have been rushing to ask for other similar products or derivatives. Some analysts predict that many more such applications will flood the financial system in the coming months. Although recently, regulatory institutions have questioned some of them.
Direxion, a financial provider known for its leveraged ETFs, on Tuesday withdrew its bid to launch the Direxion Bitcoin Strategy Bear ETF. The company had filed an application on October 26, and U.S. Securities and Exchange Commission staff requested that it be withdrawn the same day. Likewise, Valkyrie also dropped its bid for the âValkyrie XBTO Levered BTC Futuresâ ETF, which would offer 1.25 times the benchmark price of Bitcoin.
However, US market regulators have yet to give the green light to cryptocurrency spot ETFs. Criticism of investor safety around Bitcoin spot ETFs “seems completely empty,” Carter said. “Ultimately, the reason for these criticisms is simply to suppress the growth of Bitcoin.”
So, Hester Peirce, a member of the US Securities and Exchange Commission, said the US regulator has made public the reasons for rejecting a cash ETF. “The main reason is that the Bitcoin markets don’t look like our regulated securities markets.”
As for the factors that would push Bitcoin much higher. Caitlin Long, Founder and Director of Avanti Bank & Trust, said that “cryptocurrency doesn’t need a catalyst, as long as the Bitcoin Blockchain continues to add blocks, Bitcoin will be fine.”