How Can You Prepare for Bitcoin ETF Approval?

Fasten your seatbelt, guys. The approval of a spot Bitcoin ETF in the United States could be just around the corner. The excitement around the event has already caused crypto prices to rally. But that might just be the beginning. Lots of people think that if a spot Bitcoin ETF gets approved in the US that could spark the next crypto bull market. But why is this ETF such a big deal? How does it work, and what will happen to crypto prices if it gets approved? I'll break it down in this cointelegraph before we get started. If you enjoy our content, leave a like and subscribe to our channel. I'm Giovanni. Let's get into it. What is a spot Bitcoin etf? In simple terms, a spot Bitcoin ETF is like a bridge that lets people invest in Bitcoin without actually owning or managing the digital currency themselves. Instead of buying Bitcoin directly, investors can buy shares of this etf. The ETF then takes care of buying and holding the actual Bitcoin on behalf of the investors in exchange for a fee. That makes it easier for people to invest in Bitcoin without dealing with things like wallets, passwords, and exchanges. To know more about the benefits of a spot Bitcoin etf, we talked to Bloomberg analyst James Seifert.

The spot Bitcoin ETF specifically just opens up to a lot of people who literally just can't invest or it's very difficult to currently access the market. If you're looking at advisors, for the most part, they're going to put 1%, 3%, maybe 5% in like, some portion of their client accounts if at all. Right? And they're not going to want to set up a whole separate process to store those assets for those clients directly. They would much prefer just to use the stuff that's already available to them. And that's what the ETF will be, will be put on those rails.

Of course, there are also downsides. The flip side of the ETF is that you don't have direct access to the digital asset, which means you don't really own it. Basically, it's the principle of not your keys, not your coin. But again, for certain types of investors, that is an acceptable trade off for gaining access to the market. At the moment, spot Bitcoin ETFs are available in Europe and Canada. In the US the Securities and Exchange Commission has so far rejected all spot Bitcoin ETF applications out of concerns of market manipulation in the digital asset space. So why may this time be different. Well, the situation has dramatically changed when asset manager BlackRock entered the game by filing for a spot Bitcoin ETF earlier this year. According to the common logic, people at blackrock would not waste their time if they weren't sure that their application would be approved.

1 BlackRock is the largest asset manager in the world. They have close ties to what's going on in the government and the sec. They wouldn't do this without some confidence they could launch.

Another important milestone occurred when a US Court ruled that the SEC should reconsider its rejection of grayscale spot Bitcoin ETF application. The court pointed out that since the SEC already approved a Bitcoin futures etf, there is no reason why they shouldn't allow a spot Bitcoin ETF as well.

The grayscale decision ultimately says that you can't allow Bitcoin futures ETFs to trade and then argue that they're the same situation. It's not for spot Bitcoin ETF. So basically you can't have Bitcoin futures ETFs and deny spot Bitcoin ETFs.

And that's not all. BlackRock recently filed for a spot Ethereum ETF on the Nasdaq, causing Ethereum's price to jump above $2,100. Now, this move is also seen as a good news for Bitcoin. Why? Well, if folks at BlackRock weren't confident that the Bitcoin ETF will be approved, they would have waited for decisions before filing the Ethereum. In total, there are 12 spot Bitcoin ETF applications currently awaiting SEC approval. Bloomberg analysts estimate a 90% chance they will receive the green light by January 10th.

There's these periods in this whole process where you can delay, delay, delay, and then at the end of that, you can no longer delay. You either need to approve or deny. And arkin21 shares are due for their final decision on January 10th.

Now, what does all this mean for the market? There is a general consensus that if the US Approves a spot Bitcoin etf, crypto prices, prices will explode. That is because a lot of money that's been waiting on the sidelines will probably join in. Big institutional players who couldn't invest in crypto directly before will now have a way to do so. Excitement about the ETF has already impacted the market, driving Bitcoin from $26,000 to over $37,000 in a few weeks. Some experts think that this mini rally means the market has already factored in the approval, which means the actual approval will be like a buy the rumor sell the news situation. But there are signs indicating otherwise. Weeks ago, a false tweet about the ETF approval made Bitcoin's price jump from 27.900 to $30,000 in a few minutes. That showed the potential impact that a real approval could have on the market. Still, the biggest impact on prices will likely happen in the long run.

I don't think we're going to see tens of billions of dollars flow into these first few weeks of their launch. Overall net long term it should increase the demand or at least the addressable market of investors.

Yes, the full effect of an ETF approval could take a while to kick in. Experts at Alliance Bernstein say the ETF will spark a gradual increase in demand, which combined with Bitcoin's halving next year, could kick off the next big crypto wave that should reach its peak in 2025 at $150,000, according to the analysts. However, the approval of a spot Bitcoin ETF might not be enough to spark a sustainable crypto rally if the current macroeconomic situation stays the same. In particular, interest rates in the US should go down and global liquidity should increase to create better conditions for a crypto bull market. To understand more about how macroeconomic factors affect Bitcoin, take a look at our video on the Bitcoin halving. The link is in the description below. Here are the main takeaways. No matter what happens with prices in the short term, getting the green light for a spot Bitcoin ETF is a really big deal for the crypto world. It would legitimize Bitcoin in the eyes of traditional investors, attract more capital into the market, and potentially kick off the next crypto bull run. And who knows, it could be a starting point for more crypto related ETFs to get approved in the future. That's all for today. Thanks for watching the video. If you enjoyed it, please give it a thumbs up and subscribe to our channel. I'm Giovanni, your host. See you next time.