BITCOIN ETF APPROVAL IMMINENT

What To Expect

Bitcoin has had a massive price run up over the past few months. 

What's happening, what's going on, and what does it mean for you and me? 

There's a lot of noise out in the market about the imminent approval of a Bitcoin Exchange Traded Fund (ETF) in the USA. 

In this video I explain what this ETF approval means to us as investors.

Bitcoin exchange-traded funds have been live in Canada, Europe, Africa and many other places in the world for a while so why would approval in the US be so important?

AND…

What does this mean for you and me? 

Let’s back up and understand the history and what has led to where we are today. 

Ten years ago, Tyler and Cameron Winklevoss submitted the first bitcoin ETF application to the SEC. Ever since, many other high-profile companies have submitted bitcoin ETFs, but the SEC rejected every single one of them. 

Fast forward a decade, and BlackRock (the world’s largest asset manager with more money in its control than many countries) altered the discourse by submitting a bitcoin ETF proposal to the SEC. This submission signalled a significant change in how traditional finance (TradFi) perceives the crypto and Web3 industry. Driven by this news, many other prominent names in TradFi followed suit and submitted bitcoin ETFs.  

Approval of Bitcoin ETFs in the US could be the turning point for the crypto, DeFi and Web3 industry.   

ETFs will provide a legitimate and easy way for mainstream investors to invest in this new asset class (without having to hold bitcoin or have their own crypto exchange account), and many believe billions of dollars could flow into the market, driven by institutional investor interest.

But the main benefit will come from what it represents. ETF approvals in the US would provide regulatory clarity and catalyse broader integration with traditional institutions interested in engaging in the industry. The SEC approval would legitimise not only bitcoin but the entire crypto industry, paving the way for more TradFi adoption and engagement in the industry. And the reality is that for the crypto industry to thrive, it needs mainstream adoption and liquidity from TradFi players.

Simply put, approval of a USA based Bitcoin ETF means that massive amounts of investment money is going to become available to be invested into this asset class. 

It means cryptocurrency has graduated as a recognised asset class which means the traditional world of fund houses, pension funds, retirement funds, and financial advisors will be able to include this asset class into managed portfolios. That means massive amounts of money available to invest in this asset class.

This is causing an upside pressure on the bitcoin price and with that it brings other cryptocurrency prices up with it. 

When the approval happens, the full impact might take a few months to come into effect as the mechanisms for fund houses to incorporate it into their portfolios get put in place. 

But if you're holding Bitcoin it's important that you prepare yourself what might happen in the short tem.

We're already seeing this upside pressure. When that approval happens there could be a sudden spike in the price, on that elation, and also on what is known as a speculative “Pump and Dump”. 

The price pumping up as speculative money comes in and then the price dumps as they take profits. 

This is the impact of traders who are not interested in holding the underlying asset  - they want to benefit from the price volatility. Remember, there's a difference between investing and trading. Traders and speculators are going to come in, take the price up, and then they go to take profits. This will result in the price coming down. 

So you might see a whole heap of euphoria on the approval announcement and then the price will come down. Then you can expect all the crypto sceptics to come out in force yet again and say “see - even when the formal market has approved a Bitcoin ETF, it's still just a piece of junk”. 

Us HODL investors understand we own this asset because of its long term value so you're going to stay calm, having been forewarned of what might happen with a  pump and dump. Knowing that is just what hot money does. 

You're going to take this approval as a fantastic validation of this asset class, hold on and be an informed savvy investor as you watch the short term volatility go by. Then you’ll quietly smile as you watch the mass market uptake of bitcoin and cryptocurrencies and with that - a steady increase in the price of these assets.

That's what you can expect of an approval of a Bitcoin exchange traded fund that should be coming to the portfolio near you real soon.

Huge Love, 

Ann