After 10 Years Of Denials For Spot Bitcoin ETFs, U.S. Regulators May Be Forced Into Action.
Bitcoin, the world’s largest cryptocurrency, has been around for over a decade now. It has had a volatile journey, with its price ranging from just a few cents to over $60,000 at its peak in 2021. Along the way, investors have sought new ways to invest in Bitcoin, and exchange-traded funds (ETFs) have been one of the most popular.
ETFs are investment funds that trade on stock exchanges and are designed to track the price of an underlying asset or index. They have become a popular way for investors to gain exposure to Bitcoin, as they allow them to buy and sell Bitcoin without having to worry about the complexities of storing and securing the cryptocurrency.
However, despite the popularity of Bitcoin ETFs, U.S. regulators have so far refused to approve any ETFs that hold physical Bitcoin. The main reason for this is the fear that the underlying Bitcoin market is not mature enough or free from manipulation.
Instead, U.S. regulators have only approved Bitcoin ETFs that track the price of Bitcoin futures contracts, which are essentially bets on the future price of Bitcoin. This has limited the number of Bitcoin ETFs available to investors, and many in the industry have been calling for regulators to approve a spot Bitcoin ETF for years.
But after 10 years of denials, it seems that U.S. regulators may be forced into action. The main reason for this is the increasing competition from other countries, such as Canada and Europe, which have already approved Bitcoin ETFs that hold physical Bitcoin.
In Canada, the Purpose Bitcoin ETF, the first Bitcoin ETF in North America, was approved in February 2021. It has since grown to over $1 billion in assets under management, and several other Bitcoin ETFs have been approved since then.
In Europe, several Bitcoin ETFs have also been approved, including the VanEck Bitcoin ETF and the WisdomTree Bitcoin ETF.
With increasing competition from other countries, many experts believe that U.S. regulators will be forced to approve a spot Bitcoin ETF in the near future. This would be a significant milestone for the cryptocurrency industry, as it would make it much easier for investors to gain exposure to Bitcoin.
However, even if U.S. regulators do approve a spot Bitcoin ETF, it is unlikely to happen overnight. There will still be concerns around market manipulation and investor protection, and regulators will need to ensure that any approved ETFs meet the necessary regulatory standards.
In the meantime, investors can continue to gain exposure to Bitcoin through futures-based Bitcoin ETFs or by buying and holding physical Bitcoin. While this may be more complex and risky, it is still possible for investors to benefit from the potential upside of Bitcoin.
After 10 years of denials, it seems that U.S. regulators may be forced into action on approving a spot Bitcoin ETF. With increasing competition from other countries, it is becoming increasingly clear that the demand for Bitcoin ETFs is not going away anytime soon. While it may take some time for a spot Bitcoin ETF to be approved, it is clear that this would be a significant milestone for the cryptocurrency industry, and would make it much easier for investors to gain exposure to Bitcoin.