On June 21, 2023, Bitcoin (BTC) hit a $30,000 range, when companies like WisdomTree and Invesco got into the BTC exchange-traded fund (ETF) saga. Previously, BlackRock, an asset management company, also entered the BTC ETF market with the introduction of the BTC ETF. These updates seem to indicate that cryptocurrencies could head towards mainstream acceptance, which has been apparently long overdue.
“I think this development will have long-term ramifications for the cryptocurrency landscape. It could lead to more liquidity and a deeper market as fund managers will be able to deploy money in the crypto space. As for the secondary effects, this should lead to cryptocurrency hunting,” Raghuram Trikutam, co-founder of Descrypt, a crypto tax software company, told FE Blockchain.
Reportedly, WisdomTree has filed its documents with the US Securities and Exchange Commission (SEC) to list the BTC ETF on Cboe’s BZX exchange. The company also made previous attempts to apply for a BTC ETF in December 2021 and October 2022, but they met with failure. In addition, Invesco has also applied to the US SEC for a BTC ETF with Cboe BZX exchange. Invesco is believed to have highlighted the lack of US-based BTC ETFs and how this could guarantee more problems for the cryptocurrency, along with examples such as FTX, Voyager, BlockFi, and Celsius.
It is understood that the presence of these companies can help investors diversify their assets to achieve maximum return on their investment. According to Coinglass, a cryptocurrency-based platform, this trend around BTC ETFs has contributed to the liquidation of BTC, worth over $82.67 million, related to short positions. Experts believe that this institutional influence on cryptocurrencies could create a path for more companies to enter the market. Market studies have shown that this update is related to how Bitcoin is shaping the traditional financial landscape.
“The result should be beneficial for boosting engagement, and thus increasing awareness of digital assets. Furthermore, recent developments in the crypto space could help the acceptance of cryptocurrencies. With the growing interest, it could become imperative for investors to prioritize education and research for investment options,” said Rahul Bagidipati, CEO of ZebPay, a cryptocurrency exchange.
Moreover, future projections indicate that the growth of BTC ETFs has set the trend for more Bitcoin ETFs. Based on data from The Motley Fool, a financial and investment advisory firm, seven other cryptocurrency ETFs to look forward to for 2023 are Amplify Transformational Data Sharing ETF, Bitwise 10 Crypto Index Fund, Siren Nasdaq NexGen Economy ETF, First Trust Indxx Innovative Transaction & Processing ETF, Bitwise Crypto Industry Innovators ETF, Global X Blockchain ETF, Global X Blockchain, and Bitcoin Strategy ETF.
“I believe that investors prefer BTC due to its risk-adjusted returns compared to altcoins. BTC’s reputation and market position can make it a safer investment option in the cryptocurrency landscape. This situation suggests that BTC can stay on track, at the expense of altcoins,” he concluded. Rajagopal Menon, Vice President, WazirX, cryptocurrency exchange.
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