Turning point after a long journey
After months of anxious waiting, investors in the world financial market were elated when on January 10, the US Securities and Exchange Commission (SEC) approved the establishment of an exchange-traded fund (ETF) investing in Bitcoin.
This is a turning point for the world's largest cryptocurrency and the crypto industry as a whole.
Thus, financial institutions have gone a long way to gain an official position for the cryptocurrency investment channel, on stock exchanges, thereby attracting large investors. The expected cash flow is very large.
With the SEC’s decision, cryptocurrencies have officially been recognized as part of the mainstream financial system. Organizations are allowed to set up Bitcoin exchange-traded funds in the US. This has been a controversial issue in the US because cryptocurrencies are often highly volatile and associated with many other risks, including money laundering.
The SEC’s decision means the largest U.S. asset manager, Grayscale Bitcoin Trust, can convert $29 billion worth of cryptocurrencies into an ETF. More funds from institutions like BlackRock’s iShares and Fidelity are also set to launch, with some funds starting as early as January 10.
According to Reuters, the SEC has quickly approved 11 applications to open a Bitcoin spot ETF, including applications from giants BlackRock, Ark Investments/21Shares, Fidelity, Invesco and VanEck.
ETFs are expected to be a game-changer for Bitcoin, giving institutional and individual investors access to the world's largest cryptocurrency without having to hold Bitcoin directly.
This is also expected to be a driving force for the cryptocurrency market after a few turbulent years, with a series of scandals with spontaneous exchanges FTX (by Sam Bankman-Fried) or Binance...
Many asset management firms have applied to open EFT funds since 2013. However, the SEC rejected them because they considered this type of fund too sensitive to market fluctuations.
But by the end of 2023, after a period of intense discussion and lobbying, the US securities regulator SEC sent positive signals, thereby creating a wave of investment in Bitcoin.
According to Coinglass, Bitcoin investment rates skyrocketed across most exchanges in 2023. Bitcoin increased a total of 170% in 2023 and reached $45,000 on January 1, 2024.
A decade after the idea of a Bitcoin spot ETF was first floated, it is now a reality. With the advent of ETFs, the future of the cryptocurrency sector is looking much brighter.
On Reuters, expert Andrew Bond from Rosenblatt Securities said that allowing the establishment of a Bitcoin spot ETF helps strengthen Bitcoin's position as an asset class. It also promotes the rapid legalization of this currency.
Bitcoin will go to 500,000 USD/BTC?
On CNCB, famous Wall Street analyst Tom Lee - co-founder and head of strategy at Fundstrat Global Advisors - said that Bitcoin will quickly rise from the current $46,000 to $150,000 after 12 months and to $500,000/BTC after 5 years, equivalent to more than 12 billion VND/BTC.
Fundstrat Global Advisors is known as an independent financial research firm focused on cryptocurrency and blockchain research.
In a recent report, Standard Chartered Bank predicted that spot bitcoin ETFs could attract $50-100 billion in investment in 2024 alone, which could push bitcoin prices to $100,000.
In November 2021, BTC reached a historic high of $69,000, but then plummeted.
Despite the shocking news of the SEC approving an ETF, Bitcoin did not fluctuate much until the morning of January 11. BTC only increased by more than 1% to a price of $46,540, much lower than investors expected.
Many people did not expect such a low increase, around 1%, and were worried that after a period of having an ETF, if this currency did not increase, there was a high possibility of short selling, pushing the price down.
Some experts believe that the flow of money into Bitcoin will not change much, just a shift from direct investment on exchanges to ETFs. The conversion also depends on the costs. The risks with digital currencies are still very high and it is not much different from meme stocks (stocks favored by small investors on social networks).
Many investors still view investing in cryptocurrencies as akin to buying lottery tickets or meme stocks.
In a statement, SEC Chairman Gary Gensler said that approving ETFs is “the most sustainable path forward.” However, he added that the agency does not support Bitcoin, which is a highly risky and volatile currency.
In a report at the end of 2023, Crypto Crunch App ranked Vietnam third in the world in terms of the number of cryptocurrency holders, with nearly 26 million people, just behind India (nearly 158 million people) and the US (44.3 million people). China has 19.9 million people after the country introduced many measures to restrict cryptocurrency transactions in recent years. Cryptocurrency transactions are illegal in Vietnam, completely spontaneous and do not collect taxes.
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