Bitcoin ETF Approval Expected to Propel Market Influx

blockchain.news:

The anticipation surrounding the approval of a US-regulated spot Bitcoin ETF is mounting, considering its potential to significantly catalyze the adoption of Bitcoin and its recognition as a viable asset class. As of September 30, 2023, Bitcoin investment products, including Exchange Traded Products (ETPs) and closed-end funds, held about 842k BTC, equivalent to approximately $21.7 billion, according to Charles Yu, a Research Associate at Galaxy.

Prevailing Challenges in Bitcoin Investment

Current Bitcoin investment avenues present a slew of drawbacks for investors, encompassing high fees, low liquidity, and tracking errors. These inefficiencies, coupled with the administrative burden associated with direct Bitcoin ownership such as wallet/private key management and tax reporting, hamper a broader population of investors from engaging in the Bitcoin market.

Spot ETF: A Gateway for Broader Accessibility

A spot ETF is emerging as a promising solution for investors looking to gain direct exposure to Bitcoin without the need for self-custody. This development addresses several existing pain points in the Bitcoin investment landscape.

Firstly, cost efficiency is a notable advantage. Unlike the high fees often associated with hedge funds or closed-end funds, ETFs are generally known for their lower fees. This is a positive aspect for investors seeking more cost-effective investment channels. Moreover, the competitive landscape among the numerous ETF applicants is likely to drive the fees down further, making Bitcoin investments more accessible.

Secondly, the aspect of liquidity and price tracking is significantly improved with a spot ETF. As it is traded on major exchanges, a spot ETF is well-positioned to offer