It’s official. We have a spot Bitcoin ETF.
Technically, 11 of them.
Today, the SEC approved a flurry of spot Bitcoin ETFs to start trading tomorrow on stock exchanges. It’s a huge accomplishment for investors and the crypto space as a whole, and it could open the door to a wave of demand from more traditional investors.
And it may permanently alter the investment case for crypto.
What does this mean for me?
More access. Many investors don’t invest in crypto for a number of reasons, ranging from uncertainty to account restrictions. However, people are familiar with ETFs, and many have access to them through traditional brokerages. Supply and demand drive markets, so it’s a good thing whenever an asset has a larger pool of potential buyers — AKA the potential for more demand
Selling the news. Remember, markets tend to price in known events. And while a Bitcoin ETF was never a guarantee, investors have expected it since the Grayscale court decision in August. Since then, Bitcoin has rallied 60%, and crypto funds attracted 11 straight weeks of inflows from the beginning of October to the middle of December. We may initially see a “sell the news” reaction in Bitcoin, even if an ETF is a positive longer-term catalyst. It’s just the way markets work sometimes.
2024 in focus. The ETF isn’t the only thing to focus on this year. Keep an eye on the Bitcoin halving event, expected in April. Further, as investors eye rate cuts this year, they may feel more comfortable buying Bitcoin and other risky investments.
What’s next? That depends on your portfolio. It’s hard to say how Bitcoin reacts to the spot ETF news in the coming days and weeks. But at the very least, more demand could help stabilize Bitcoin prices and shield the space from nasty bear markets.