How Do We Decide If Bitcoin ETFs Are "Nearly Certain"?

Where Are The Bitcoin Etfs Positioned?

Seeing another twist recently, the Bitcoin ETFs was reported by anonymous Commodities Futures Trading Commission officials told online publication Zerohedge that the approval of these funds by the SEC was nearly certain. There was a flurry of reports from the mainstream and crypto-related publications that prompted discussions regarding the possibility. 

Whereas according to SEC, it was stated that it was postponing decisions for specific ETFs, as the Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change as it has sufficient time considering this proposed rule change. The situation is ripe as additionally the SEC has added that it would decide for the Bitcoin ETFs proposed by Direxion Asset Management as the agency still expects to rule on an application by the Chicago Board Options Exchange for a Bitcoin ETF. 

Whereas that is not the end of the matter as the race is on between funds to become the first cryptocurrency ETF. There is this San Francisco based startup Bitwise Investments that has become the latest fund manager to file for an ETF where the startup has already had an index fund that thereby tracks the returns for the top 10 cryptocurrencies. According to Matthew Hougan, the Global Head of Research at Bitwise, there are listed several recent developments that played into the startup’s move. 

To note the fact it was among these factors that the stability in crypto markets after last year’s volatile price swings and emerging clarity in regulation related to the status of prominent cryptocurrencies such as Bitcoin and Ethereum. While it was also said that the 93% increase in futures volume and development of custody solutions as pluses in favor of Bitcoin ETFs. Thereby the developments highlighted by Hougan are timely responses by the cryptocurrency industry in response to SEC’s letter listing 31questions. 

He adds that as they know today that investors want access to crypto assets based on the massive increase in crypto trading accounts, the point of view is that the investing public will be better served by having access to the SEC-regulated public, open-ended investment vehicles that are transparent and professionally managed. 

How Will Bitcoin ETFs Affect Crypto Markets? 

To be stated the key precipitating factor for the introduction of Bitcoin ETFs is the prospect of institutional capital thereby entering the cryptocurrency space. According to Hougan from Bitwise, better access means better price discovery and everything that gets us down that road whether it’s the launch of futures or launch of ETF is a good thing. 

According to the founder of Crypto Fund Research, Joshua Gnaizda, this is a research firm focused on the cryptocurrency industry forecasting increased institutional activity in the cryptocurrency space and hedge funds that have long been hesitant to the investment in cryptocurrencies due to problems with physical custody of Bitcoin. Thereby unlike the commodity gold to which it is often compared, Bitcoin cannot be stored physically or shipped in containers to a recipient as the digital storage of those cryptocurrencies that has surely proved to be problematic with numerous hacks plaguing its security. 

It was according to the recent introduction of custody solutions by the likes of Coinbase and Ledger that could change this equation leading to a bump in bitcoin’s price. This is where Bitcoin ETFs purchase Bitcoin on exchanges thereby directly increasing demand for Bitcoin as long as the fund has net inflows as Gnaizda explains. To quote he further says that he would expect the net inflows for the short to the medium-term at least since there will be little competition and there is much unmet institutional demand. 

While there is an ETF approval that could also pave the way for an options based product, for cryptocurrencies, Hougan rightly points to historical precedent as proof with the regulators launching the first commodity ETFs as well as commodity basket ETFs, which he wrote via email. It is here that as Gnaizda concurs, the ETF will trade on CBOE that providing an additional opportunity for large investors to hedge various risks. 

The Final Words To Summarize

Subsequently, there is an alternative perspective coming from Bloomberg Intelligence that the research firm forecasts bearish technical fundamentals for Bitcoin as a reason that its price will decline. According to the authors, if a Bitcoin ETF is approved for US trading soon, $ 8,000 is a likely initial key resistance level, and residing just below that handle are the 18-and 52- week averages. This is where the 18-week acted as good support in the 2017 bull market and the 52 weeks is the more significant measure. Therefore to note there is still something substantial that should be required to arrest recent bearish indications where the 18 has crossed below the 52 and last week was an outside week down thereby absent a bullish catalyst $ 4,600 is the next support.