The ETF is the biggest issue going which is need to get approved by regulatory as a result the first Bitcoin exchange-traded fund (ETF) is expected to be approved by February 2019. But some, the experts have stated that the existence of ETFs may increase the volatility of the market and may bring up more investors to invest.
Out of many experts one of a contributor of CNBC’s Fast Money and the CEO at BKCM, Brian Kelly explained that “how the price of Bitcoin has lower end of $7,000 to 8,000 in early August this could be ascribed to the increasing hype around Bitcoin ETFs”, a few months ago analysts have been divided on the effect of the ruling of the US Securities and Exchange Commission (SEC) regarding Bitcoin ETFs on the crypto market.
Last week, unfortunately as the price of Bitcoin diminished down against US dollar, Kelly indicated that the SEC’s rejection of the Winklevoss Bitcoin ETF likely had an impact on the market and that the investor overreacted on the news which is not needed actually hence, the ETF hype is putting its impact on the market.
Recently the well-respected cryptocurrency researcher and security expert Andreas Antonopoulos were in a Q&A session where he disclosed his views about Bitcoin ETFs, he stated that he is against the introduction of ETFs in regulated markets.
Antonopoulos said that while ETFs have the ability to open the Bitcoin market to a group of institutional investors and retail traders that have not been able to trade the dominant cryptocurrencies due to issues pertaining to regulation, they also provide a platform for large investors to manipulate the price of BTC.
“Everybody is so excited about ETFs. What we have seen in other markets is that when an ETF becomes available, the price really increases dramatically, as suddenly that commodity becomes available to a lot more investors and these investors pile on. But, the other side of it is that there are always these claims that the commodities markets are heavily manipulated and opening up these ETFs only increase the ability of institutional investors to manipulate the prices of commodities.”
He kept the possibility that after the existence of ETF of the Chicago Board Options Exchange (CBOE) and VanEck-SolidX may lead to billions of dollars in new capital into the Bitcoin market, the price of BTC swings from margin on both upside and downside during the operating market hour of the US stock market, if an ETF is launched.
In the ETF market, investors do not investors do not necessarily have the motivation or the incentive to intentionally bring down the price of Bitcoin by manipulating its price trend. But, for instance, if a group of investors decides to utilize the ETF market to manipulate the price of BTC to record gains in the futures market, the Bitcoin market could become significantly more volatile.
What is the ETF futures, and Long-Term Growth?
ETFs can be a great investment vehicle for small and large investors alike. These popular funds, which are similar to mutual funds but trade like stocks, have become a popular choice. Good information is an investor’s most important tool. In the long run, as more publicly tradable investment vehicles are introduced by regulated financial institutions and the liquidity of Bitcoin drastically improves, it will become difficult to manipulate the price trend of the crypto market. However, in a period of instability, high volatility, and fast growth, publicly tradable investment vehicles could provide enough leverage to large investors that are capable of reversing market trends.