The SEC approved the first Bitcoin ETF after 15 years on January 10, 2024. This brings billions into crypto but also transfers Bitcoin from retail to institutions.
The US Securities and Exchange Commission (SEC) has finally approved the first Bitcoin exchange-traded fund (ETF) on January 10, 2024, after over 15 years of waiting. This moment marks a major milestone in the history of cryptocurrency and opens the floodgates for billions in institutional money to pour into Bitcoin and crypto markets.
In this post, we will analyze what the approval of a Bitcoin ETF means, which specific ETFs have been approved, reactions from the crypto community, and most importantly — what impact this will have on Bitcoin and altcoin prices going forward.
The ETFs Approved
The Bitcoin ETFs approved by the SEC include those submitted by asset managers VanEck, Valkyrie, WisdomTree, Grayscale, and several others. In total, over 10 spot Bitcoin ETFs have received the green light.
These ETFs are set to start trading as soon as, January 11, 2024, on major US exchanges like CBOE, NYSE, and Nasdaq.
Having multiple fund providers launching Bitcoin ETF products prevents any one firm from commanding too much influence over Bitcoin prices. It also provides more choice to institutional and retail investors alike.
Billions Set to Flow into Crypto
The approval of Bitcoin ETFs is projected to bring in billions of dollars in fresh capital into crypto markets. Analysts estimate over $50 billion could pour into Bitcoin in the first few months alone.
To put this into perspective, the total market cap of all stablecoins before this news was only around $130 billion. Bitcoin ETFs are set to dwarf that amount.
These inflows will come not just from the ETFs themselves, but also from ancillary financial products built on top of them. Options, futures, margin trading — the entire gamut of institutional crypto trading begins now.
Bitcoin Handed Over from Retail to Institutions
Many also see this as the long-awaited handing over of Bitcoin from individual retail traders to big institutional investors and Wall Street.
Data shows Bitcoin has already rallied 83% since Grayscale filed for SEC approval 207 days ago. However, the spot price saw muted reaction on the actual approval day, indicating expectations were already priced in.
Nevertheless, this transfer of power ushers in a new era for Bitcoin. One where huge asset managers trading on behalf of pension funds, endowments, and more have significant sway over crypto markets.
For long-time crypto enthusiasts, this transition evokes mixed feelings. On one hand, institutions bring much-needed liquidity and reduce volatility. On the other, decentralized ethics are watered down in favor of Wall Street interests.
Focus Shifts to Ethereum
With the Bitcoin ETF news now behind us, market participants are shifting focus to Ethereum. The expectation is that an Ethereum futures ETF could get approved as early as May 2024.
This narrative shift was evidenced in the price action: while Bitcoin traded flat, Ethereum pumped 7% on its ratio against Bitcoin. Leading DeFi and Layer 2 projects like Arbitrum, Optimism, Rocket Pool, ENS also broke out to new highs.
Clearly, traders anticipate an Ethereum spot ETF is next and are positioning accordingly in altcoins related to ETH. The most hated trade in crypto — the ETH/BTC pair — suddenly morphed into the most crowded trade after the Bitcoin ETF news.
Conclusion
The Bitcoin ETF saga that persisted for over a decade has finally concluded with approval by the SEC. This massive news is set to usher hundreds of billions into crypto markets in 2024 but also transitions Bitcoin into an institutional-dominated asset.
For future price action, keep an eye on Ethereum and its surrounding ecosystem as traders expect an ETH ETF approval to drop next. The bull market that paused in 2022 is likely back in full swing.
Source:coinupup.com
The Long-Awaited Bitcoin ETF is Finally Here: What It Means for Crypto was originally published in The Dark Side on Medium, where people are continuing the conversation by highlighting and responding to this story.