hype than bitcoin itself?
- What is the difference between Bitcoin ETF and Bitcoin? Why is it considered better?
- The Bitcoin ETF is on its way to entering traditional markets and exchanges.
- This brings many changes; some are even better than the existing ones and could change the perception of investing in Crypto!
Cryptocurrencies have been out of the market for a while now and have grown in popularity due to their unique characteristics. Yet sometimes it feels like they are going through an existential crisis. Undoubtedly, the investment of the crypto market is huge, but is it enough to only have value in terms of money? It seems to be resolved soon. Many companies are offering a new take on investing in crypto. One of those ways could be an ETF or exchange-traded fund in Crypto.
Bitcoin ETF can be thought of as a BTC and a standard ETF or index fund. Simply put, as we know about index funds is that it is a pool of valuable and top performing assets or companies. People interested in investing in these companies together can invest in a related index fund. The Bitcoin ETF is no different, except we have BTC at its heart here.
What was the need for BTC ETFs when BTC was already available?
BTC ETF will solve many current issues and problems related to BTC in various fields. It can introduce a new way to invest in BTC, raise awareness about it, make it more mainstream, make it safer, and many more. Let’s review the changes BTC ETF can bring and why it is better one by one –
- Can’t afford to buy Bitcoin? Don’t worry, take a piece-
How it will look when buying a bitcoin share can easily be understood with the above mentioned mode of operation of an index fund. So instead of having a whole bitcoin that might cost around $50,000, you can own a piece of bitcoin by just getting an ETF.
2. The positives were taken downplaying the negatives – Bitcoin ETF is said to have all the positive aspects of Bitcoin, but people feel bad about its negative traits can be understated. As if Bitcoin seems to be volatile, which makes it wary to invest. But in a Bitcoin ETF, it would be a pool, so even if a currency goes down, the people managing the index would adjust the pool so that the ETF is growing overall. It will be like giving you constant heat without burning yourself.
3. Investing made easy – Along with the Bitcoin ETF, it will be listed on the countries stock market. Their investment is done in a traditional and trustworthy way. No one would need exchanges like Binance; you can directly deposit money fast in BTC. This will make the process easy and reliable, hence minimal friction.
4. Believe – By simply being listed in any country’s stock exchange list, the perception towards Crypto will be positively affected. This will create awareness about them. It will also increase the much-needed belief in Bitcoin among investors and everyday people.
5. Not a sprint, a marathon – As we know in terms of investment, “high risk, high gain and low risk, low gain”, it will follow this principle. It surely won’t give you high returns in a short time which is also a small chance due to its volatility, but it will definitely give you a good ROI in the long run.
The most renowned ETFs for Bitcoin are Grayscale Bitcoin Trust (GBTC), which is currently at $35.3, Proshares Bitcoin ETF Trust (BITO), which is at around $29.8, Amplify Transformational Data Sharing ETF (BLOK) is at $40.3, and plenty out there and emerging too.
So what do you have about ETFs. Yes, a lot of positives, isn’t it!
EFTs can be seen as a new and different way to invest, and that is sure to change and impact investing in Bitcoin and even other Cryptos. Investors and crypto enthusiasts alike can stand a chance to be a part of this most anticipated change in investing. With these steps taken and accepted, the days are not far off when we will see Bitcoin and other cryptos in mainstream investing and would soon be a new normal.