Wael Alreweie | Istock | Getty Images

Bitcoin investors are eagerly waiting for regulators to approve the first spot Bitcoin exchange-traded fund in the US, which could be significant for cryptocurrency investors, experts say.

Last week, Bitcoin price hit an 18-month high and subsequently rose to $37,970 BlackRock has taken the first steps towards an Ether ETF. Bitcoin price has more than doubled since the beginning of 2023, but is still well below its November 2021 peak.

At least nine asset management firms – including BlackRock, WisdomTree, Valkyrie and others – are awaiting approval from the Securities and Exchange Commission to issue a spot Bitcoin ETF. Experts assume that the first approval could take place at the beginning of 2024.

More from the ETF strategist:
3 Key Reasons Why Exchange Traded Funds Became Mainstream
Here’s how to use ETFs in three popular investment strategies
ETFs are among the top 3 products that have become more popular since 2020

“For ETF investors, this would be the best product on the market,” said Bryan Armour, head of passive strategy research for North America at Morningstar. “All other options currently have deficiencies to varying degrees.”

Currently, US investors can purchase Bitcoin futures ETFs, which hold Bitcoin futures contracts or agreements to later buy or sell the asset at an agreed price. The long-awaited Bitcoin spot ETF would invest directly in the digital asset.

If the SEC approves a spot Bitcoin ETF, Armor expects a “batch approval” with multiple ETF listings on the same day. “I would expect them to decide on spot ETFs holistically as most issuers take similar approaches to applications,” he said.

“There are many good signs that the SEC is taking the recent filings more seriously,” Armor said. “I’m more bullish than ever on a Bitcoin ETF.”

Some crypto investors expect Bitcoin to rally after approval, but it’s also possible the price will fall as investors sell to make profits, Armor said.

Still an “extremely volatile” asset

While SEC approval of a spot Bitcoin ETF could make the asset class more accessible to the masses, experts urge investors to consider their risk tolerance and goals before jumping in.

“I think it depends on the investor,” said certified financial planner Ben Smith, founder of Cove Financial Planning in Milwaukee. If you’re a more aggressive investor with a higher risk tolerance, a spot Bitcoin ETF could fit into a diversified portfolio, he said.

Investors should buy stocks now, says Sylvia Jablonski, CEO of Defiance ETFs

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *