Spot Bitcoin ETF: A paradigm shift in the world of cryptocurrencies? Here's what top industry experts make of the move

livemint.com:

After a long wait, US markets regulator Securities and Exchange Commission (SEC) finally gave a go-ahead to the spot bitcoin ETFs on Wednesday, a move that led to a massive jump in the bitcoin prices.

Bitcoin was trading around $46,954 at 4.45 pm, up 2.9 percent in the past 24 hours, shows CoinDeskdata. In the early hours of Wednesday, bitcoin price had topped $47,000 before paring some of the gains.

In fact, considerable gains have already been incorporated in anticipation of the move. The bitcoin surged nearly 6 percent since October on speculation that the spot bitcoin ETF would get the final approval in the early days of January.

This move is expected to widen the cryptocurrency’s reach and popularity among investors. After the spot ETF approval, there could be an inflow of $3 billion in just one day and as much as $55 billion in the next five years, one Reuters report had claimed.

Let us understand what exactly is this and how relevant it would be for crypto prices in the near and medium-term future:

A spot bitcoin ETF refers to an investment instrument which can invest directly in bitcoin rather than in its futures contracts.

This would enable investors to get direct exposure to bitcoins rather than through derivative contracts. So, a spot ETF would own actual bitcoins, which will lead to higher transparency in the crypto transactions, and obviously greater stability of crypto prices.

Notably, SEC has rejected all such applications seeking approval for spot bitcoin ETF in the past 10 years but the speculations were rife that the approval would come at the start of calendar year 2024.

Meanwhile in India, Reserve Bank of India (RBI) Governor Shaktikanta Das reiterated that banking regulator’s stance continues to be