On June 21, 2023, Bitcoin (BTC) clocked the $30,000 range, upon companies such as WisdomTree and Invesco entering the BTC exchange-traded fund (ETF) saga. Previously, BlackRock, an asset management company, also entered the BTC ETF market through filing for a spot BTC ETF. These updates seem to suggest that cryptocurrencies can head for mainstream acceptability, which has been awaited for a seemingly long time.
“I believe this development will have long-term repercussions for cryptocurrency landscape. It can lead to more liquidity and a deeper market as fund managers will be able to deploy funds in crypto space. As for secondary effects, this should bring in research for cryptocurrencies,” Raghuram Trikutam, co-founder, Descrypt, a crypto taxation software company, told FE Blockchain.
Reportedly, WisdomTree submitted its documents to United States (US) Securities and Exchange Commission (SEC) for listing its BTC ETF on Cboe BZX exchange. The firm also made previous attempts to apply for a BTC ETF in December, 2021, and October, 2022, but they met failure. In addition to that, Invesco also applied with US SEC for a BTC ETF with Cboe BZX exchange. It’s believed that Invesco highlighted the lack of US-based BTC ETFs and how that can ensure further cryptocurrency debacles, along with using examples such as FTX, Voyager, BlockFi and Celsius.
From what it’s understood, presence of these companies can help investors with diversification of their assets to gain maximum return on their investment. According to Coinglass, a cryptocurrency-based platform, this trend around BTC ETFs has contributed towards BTC liquidations, valued at over $82.67 million, with regard to short positions. Experts believe that this institutional impact on cryptocurrencies can create a pathway for more firms to access the market. Market studies have shown that this update has been correlated with how BTC can shape traditional financial landscape.
“The outcome should be beneficial to enhance engagement, thereby, raising awareness about digital assets. Furthermore, recent developments in crypto space can help with acceptance for crypto. As interest grows, it can become crucial for investors to prioritise education and research for investment choices,” Rahul Pagidipati, CEO, ZebPay, a cryptocurrency exchange, mentioned.
Moreover, future predictions indicate that BTC ETFs’ growth has set the trend for more Bitcoin ETFs. Based on data from The Motley Fool, a financial and investing advice company, seven more 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 & Process ETF, Bitwise Crypto Industry Innovators ETF, Global X Blockchain ETF and Global X Blockchain & Bitcoin Strategy ETF.
“I think investors are favouring BTC due to its risk-adjusted returns compared to altcoins. BTC’s reputation and market position can make it a safer investment choice in the cryptocurrency landscape. This situation indicates the potential for BTC to continue its trajectory, at expense of altcoins,” Rajagopal Menon, vice-president, WazirX, a cryptocurrency exchange, concluded.