Bitcoin ETF could fail: Effects on Bitcoin and other old coins

Von Krypto News Österreich

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The cryptocurrencies did well this year, especially Bitcoin, Litecoin, Ethereum and Bitcoin Cash were able to increase in double digits. In comparison, traditional assets such as stocks and raw materials have not developed as positively. One reason for the strong performance of the cryptocurrencies in the past 30 days was the hope of introducing a Bitcoin ETFs.

Blackrock, the world's largest asset manager, was the first company to apply for a spot ETF in June. Shortly afterwards, other companies in the financial services industry such as Investco, Wisdomtree and ARK Invest submitted their applications for ETFs. In contrast to previous applications, a surveillance clause for the stock market -traded fund was introduced in these applications.

Although it is still too early to say whether the Securities and Exchange Commission (SEC) will approve these funds, there are already skeptical voices. In the past, the SEC rejected similar applications and Gary Gensler, the chairman of the SEC, has already expressed doubts. In addition, the SEC was sued by the parent company of the Grayscale Bitcoin Trust in the USA, as this questions the rejection of companies with licenses for the implementation of regulated ETFs.

Nevertheless, there is also the possibility that the trust fails, even if the green light is given for the ETFs. Analysts from JP Morgan have warned that existing Bitcoin ETFs have found little interest from investors and have not registered any funds from gold ETFs.

The rejection of the Bitcoin Spot ETFs by the SEC would also have an impact on other old coins such as Litecoin, Ethereum and Bitcoin Cash. The likelihood that they will receive their own ETFs would then be almost zero. If the Bitcoin Spot-ETF is rejected and Grayscale loses in court, the positive course development of the cryptocurrencies could be reversed.

Institutional investors currently only have limited opportunities to gain access to Bitcoin. Some invest in the Grayscale Bitcoin Trust or the Proshares Bitcoin Strategy ETF, while others invest in Spot ETFs listed on stock exchanges in Canada and Europe. So far, however, these funds have not recorded any major tributaries. The ProShares Bitcoin Strategy ETF recently exceeded the $ 1 billion mark of assets, while the Grayscale Bitcoin Trust has over $ 19 billion in asset.

The cryptocurrency markets are faced with a potentially decisive phase in which the approval of Bitcoin ETFs by the SEC or its rejection could have significant effects on the price development of cryptocurrencies. Investors and market observers are excited to see how the situation will develop.