Increasing institutional demand for Bitcoin ETFs in the USA: Are there enough bitcoins available and are private investors suppressed?
Increasing institutional demand for Bitcoin ETFs in the USA: Are there enough bitcoins available and are private investors suppressed?
More and more companies are aiming to launch the first Bitcoin ETF in the USA. However, there are some questions: Is there enough Bitcoin available at all? And will there be private investors suppressed in the future?
The SEC (Securities and Exchange Commission) recently accepted the Bitcoin Spot ETF applications from Blackrock and Bitwise and others are still being checked. But is the Bitcoin liquid enough to meet the increasing demand? And are private investors displaced by the high institutional demand?
The first ETF applications from Blackrock and Fidelity were rejected according to insider information because they contained insufficient information about surveillance agreements. However, the applicants have improved and the applications were submitted again. All companies rely on the Coinbase crypto tour as a partner for surveillance agreements, although Coinbase is currently in a legal dispute with the Sec. One example is the latest Bitcoin ETF application from ARK Invest, which would enable additional access to information about Bitcoin-Spot-Trades on Coinbase. This would be available if it were necessary in the context of the surveillance program.
The SEC accepted Blackrock and Bitwise's application and an official examination procedure is initiated. Further applications for Bitcoin funds, including Wise Origin Bitcoin Trust, Wisdomtree, Vaneck and Investco Galaxy, are also checked. Blackrock's introduction to the competition for the first direct Bitcoin ETF is important due to the company's reputation in the financial sector.
The increasing number of ETF applications is considered a positive development for the entire cryptos sector. Due to the increasing number of applications, the chances of success increase and the SEC can evaluate various strategies and concerns.
In view of the acceptance of the Bitcoin ETF applications, the question arises as to whether there are enough bitcoins to cover the high demand. The Bitcoin is very limited to 21 million units. The demand continues to increase, while the offer is limited because a large part of the bitcoins is already in the hands of long -term investors. ETF providers have to physically secure the bitcoins kept in the fund, for example via the Coinbase platform. The problem is that crypto exchanges themselves have only a limited number of bitcoins, which shrinks the supply, while the demand may have not yet been covered.More than four million bitcoins are available, of which almost 75 percent are available at short notice. This corresponds to impressive $ 124 billion that could be invested by the largest asset managers in the world. However, around 15.2 million bitcoins are considered illiquid, which means that investors cannot easily separate from these assets. Blackrock and other companies will have to invest in the future to meet the purpose of a Bitcoin spot ETF.
The approval of the ETF applications by the SEC is expected to take some time and the decisions could affect the liquidity of Bitcoin.
Together with the increasing institutional demand, the question arises as to what will be about private investors in the future. Some fear that private investors could be displaced by institutional demand. Bitcoin bull Michael Saylor expresses these fears. Crypto analyst Anthony Pompliano expects a show of strength between institutions and private investors.
pompliano also believes that the Bitcoin could become "very illiquid" if Wall Street and Blackrock take part in the market. Retailers may not want to sell to Wall Street and the only thing that can move in this constant system is the price.
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