One of the reasons for Bitcoin hitting $8,500 in recent weeks is mainly due to the anticipation of the crypto industry to the possibility of having a Bitcoin ETF. Just how much of a game changer is a Bitcoin ETF? For many, this could pave the way towards the entry of institutional investors.
Unfortunately, the Securities and Exchange Commission expressed its concerns of price manipulation and for this reason, the agency has rejected the application of Cameron and Tyler Winklevoss.
On Wednesday, the Securities and Exchange Commission decided to delay its decision regarding the proposed Bitcoin exchange-traded fund by VanEck and Solid X. And as a result, Bitcoin went down to around $6,250 as of writing this article. According to reports, $9 billion was wiped out of the market.
Unlike the Winklevoss twins that attempted to submit their Bitcoin ETF for the second time, this is already VanEck’s third attempt. The SEC however announced to delay the decision until September 30. However, there are also other Bitcoin ETF applications submitted to the agency. However, the SEC still hasn’t approved any of these applications yet.
VanEck for its third attempt teamed up with Solid X which is a financial service company. An ETF is the type of financial product that tracks the price of an asset and is listed on an exchange. This means that investors don’t actually need to buy a Bitcoin. And because of this, it holds a huge potential for the growth of the crypto industry.
Favoring Institutional Investors
One of the reasons why crypto experts such as that of Tom Lee is bullish regarding Bitcoin is due to the possibility that there could be institutional investors looking to participate in the market. ETF’s are viewed by many as a way that can hasten the entry of institutional investors into play. This can be seen as a safer way of getting involved in the industry and buying Bitcoin compared to going to a crypto exchange.
Adoption Over ETF?
If you will ask the likes of Vitalik Buterin who is the co-founder of Ethereum, he believes that the market is putting “unnecessary emphasis” on ETFs. He argued that though ETFs can help pump the price momentarily, a campaign for mass adoption would’ve had a long-lasting effect on the cryptocurrency. He said in his tweet that “I think there’s too much emphasis on BTC/ETH/whatever ETFs, and not enough emphasis on making it easier for people to buy $5 to $100 in cryptocurrency via cards at corner stores. The former is better for pumping price, but the latter is much better for actual adoption”.
Will there still be a chance that we are going to see a crypto-related ETF soon? The SEC already mentioned after rejecting the Winklevoss Bitcoin ETF application that “over time, regulated bitcoin-related markets may continue to grow and develop”, which could eventually give birth to a Bitcon related ETF.
But of course, we still don’t actually know when is this going to happen. However, if there’s good news to investors who firmly believe about the possibility of a Bitcoin ETF, now is actually a good time to purchase your Bitcoin. Tom Lee even mentioned that the price drop experienced by Bitcoin recently is quite consistent with its history of corrections in the past.