An ETF would make exposure to bitcoin for many mutual funds easier. The first decisions of the SEC will appear next Monday.

In less than a week, the first of a group of decisions by the United States Securities and Exchange Commission (SEC) on a score of requests for bitcoin exchange-traded funds (ETFs) introduced this year will be public.

According to various analysts of the bitcoin market, there are high expectations of approval of one or more ETFs, within the SEC announcements, expected from Monday, October 18.

Between October 18 and November 3, six decisions on bitcoin futures ETFs will make their public appearance, while SEC’s opinions on 12 physical, or spot, bitcoin ETFs will be communicated from next November 14.

In his latest prediction on the bitcoin market, analyst Willy Woo points out that if any ETFs waiting for a move in October obtains approval, users can immediately expect a speculative rally.

Impact of a Bitcoin ETF Approval

An analysis by Arcane Research adds three possible situations regarding the SEC approval of one or more bitcoin ETFs and how these approvals would impact the price of that digital currency.

First of all, the impact on the price of BTC would get mentioned immediately after the approval announcement. There is also the fact that the bitcoin market would already be under upward pressure in anticipation of approval.

The report highlights that approval on an ETF would lead to an upward movement, and market participants would intend to gain more exposure to bitcoin.

If a futures-based ETF receives approval, it could cause increased buying pressure on CME, the futures exchange, which would drive the growth of open interest in futures over the medium term.

According to the report, this situation would attract more capital. This capital could generate increased pressure on the bitcoin spot market.

In the long term, assuming a good verdict from the SEC, ETFs as another investment bridge in bitcoin, ETFs can be vital to bitcoin price action. A longer-term influence would become less important, according to Arcane Research.

Impact of an ETF on Institutional Investments

The What Bitcoin Did podcast, led by Steve McClurg and Jeff Kilburg of Valkyrie Funds, expressed the increased access of institutional investors to bitcoin once an ETF gets approved.

Kilburg spoke about a relevant feature linked to a bitcoin ETF that represents the intersection of traditional finance and cryptocurrencies.

Steven McClurg, CIO of Valkyrie Investments, expressed his thoughts on the approval of ETFs that the SEC may be using. Criteria may get included, but it has no limits regarding the date of introduction, the structure of the ETFs, and the guidelines for their management and custody, McClurg said.

However, McClurg released a hypothesis about which ETF would receive approval according to their structure and other vital factors.

According to McClurg, of the proposed spot ETFs, which await the SEC’s final word in November, the first batch of approved ones would be those introduced by VanEck, Wisdomtree, and Valkyrie.

By: Jenson Nuñez


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