Bitcoin ETFs: Game-changer or simply overhyped asset class?

January 11, 2024
1 min read


  • The US financial regulator, the Securities and Exchange Commission (SEC), has approved the creation of exchange-traded funds (ETFs) that track the value of bitcoin.
  • The SEC emphasized that its approval does not mean it is endorsing bitcoin itself.

The approval of bitcoin-tracking ETFs by the SEC is seen as a significant development for the cryptocurrency. It allows US institutions and private individuals to invest in bitcoin without the need to open a digital wallet or use a crypto trading platform. The approval has been described as a “watershed” moment, as it brings ease of access and mainstream respectability to bitcoin. Large investment firms like BlackRock are expected to offer these new ETFs.

However, some experts caution against overly optimistic expectations. Bitcoin’s price has been volatile in the past, and the cryptocurrency itself has no intrinsic value. While demand for bitcoin may increase with the availability of ETFs, it’s uncertain whether the influx of new investors will meet expectations. Standard Chartered analysts have predicted that the ETFs could attract $50 billion to $100 billion in investments this year, potentially driving bitcoin’s price to $100,000. However, even the lower end of this predicted investment range would require more than just retail investors, raising doubts about institutional interest in a volatile instrument.

On the day the ETFs were launched, trading volume in bitcoin increased, and the price exhibited its usual volatility. It remains to be seen whether the introduction of ETFs will truly mark a new era for bitcoin. While the approval brings attention and hype, there is a risk that the reality may not live up to expectations.

Overall, experts are divided on whether the SEC’s approval of bitcoin-tracking ETFs is a watershed moment or a damp squib. The future of bitcoin and its price trajectory will depend on the actions and decisions of investors in the coming months.

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