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- What is the difference between Bitcoin ETF and Bitcoin? Why is it being considered better?
- Bitcoin ETF is on its way to entering into traditional markets and exchanges.
- It’s bringing many changes; some are even better than the existing ones and might change the perception of investing in Crypto!
It’s been a while since Cryptocurrencies have been in the market and have gained a lot of popularity due to their unique features. Still, sometimes it feels like they are being passed through an existential crisis. Undoubtedly, the crypto market investment is enormous, but is it enough to have only value in terms of money? It seems to be resolved soon. Many of the firms are coming forward with a new vision of investing in Crypto. One of those ways could be an ETF or Exchange Traded Fund in Crypto.
Bitcoin ETF can be seen as a standard BTC and ETF or Index fund. In layman terms, as we know about Index Funds is that it’s a pool of valuable and best-performing assets or companies. Those interested in investing in these companies together can invest in a related Index Fund. The Bitcoin ETF is not different, except that we have BTC at its core here.
What was the need for BTC ETF while there was BTC already available?
BTC ETF will solve a lot of present problems and issues related to BTC in various fields. It can introduce a new way of investing in BTC, create awareness towards it, make it more mainstream, make it look safer, and many others. Let’s overview the changes BTC ETF can bring and reasons for it being better, one by one-
- Can’t afford Bitcoin? Don’t worry, have a piece of it-
How it will do buying a share of bitcoin can easily be understood with the above-mentioned working way of an Index Funds. So instead of having a whole Bitcoin which could be approx $50,000, you can be an owner of a piece of Bitcoin by just getting an ETF.
2. Positives were taken minimizing Negatives – Bitcoin ETF would have all the positive aspects of Bitcoin, but people feel wrong about its negative traits can be minimized. Like if Bitcoin seems to be volatile, making it distrustful to invest. But in a Bitcoin ETF, it would be a pool, so even if any currency goes down, people who manage the index would adjust the pool so that overall the ETF would be in growth. It will be like giving you constant warmth without burning you.
3. Investing made easy – With the Bitcoin ETF, it will be listed in countries’ Stock Market. Their investment is made in a traditional and trustworthy way. No one would need Exchanges like Binance; you directly can put money down quickly into BTC. It’ll make the process easy and trustworthy, hence minimum friction.
4. Believe in it – By just getting listed in the list of Stock Market Exchanges of any country, the perception towards Crypto will be affected positively. It is going to create awareness about them. It will also raise the much-needed belief in Bitcoin among everyday investors and people.
5. Not a sprint, A marathon – As we know in terms of investment, “High risk, high gain and low risk, low gain,” It will be following that principle. It will surely not give you high returns in a short period, which is also a tiny chance because of its volatility but definitely will give you a good ROI in the long term.
The most renowned ETFs for Bitcoin are Grayscale Bitcoin Trust (GBTC), which is currently at $35.3, Proshares Bitcoin ETF Trust (BITO), which is at $29.8 approx, Amplify Transformational Data Sharing ETF (BLOK) is at $40.3, and a lot of out there and emerging too.
So, what you have got about ETFs. Yeah, a lot of positives, right!
EFTs can be considered a new and different way of investing, and it will surely change and impact the investing in Bitcoin and even in other Crypto. Investors and Crypto Enthusiasts both can have a chance to be a part of this most awaited shift in terms of investing. With these steps taken and accepted, not those days are far away when we will see Bitcoin and other cryptos in mainstream investing and would be a new normal soon.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
