LakeUnited States Securities and Exchange omission (SEC) made official the approval of Bitcoin (BTC) spot ETFs.
This is positive news for the crypto ecosystem in general since the approval can be a milestone in the adoption of the cryptocurrencies by conventional finance, sinceThe ETF structure provides financial institutions and advisors with a familiar and regulated way to purchase exposure to Bitcoin. For its part, $BTC is trading with a rise of 5.10% to reach the level of USD 47300.
Bitcoin retreated after hitting its highest since 2022 but enthusiasm persists
$BTC continues its upward trend; the most popular cryptocurrency on the market has registered its highest value in 20 months. The eThe expectation that existed behind the approval of Bitcoin ETFs was one of the main reasons behind the rise of the crypto asset, which has just recorded a great 2023 with a rise of more than 155% in dollars.
The last year has been very good for the cryptocurrency market and other risk assets, mainly due to growing optimism about a possible interest rate cut by the Federal Reserve.
As the market increasingly sees the possibility of an end to restrictive monetary policy closer, risk assets, including cryptocurrencies, have recovered a good part of their losses. recorded during 2022, a year in which the market suffered a significant correction and the US central bank chose to raise rates to their highest level in more than 20 years.
Why would a BTC spot ETF be good news for the crypto world?
First of all, It would give more legitimacy to cryptocurrencies. An ETF is an investment product regulated by the SEC, which means that complies with certain standards of transparency and investor protection.
At the same time, ETFs are investment products that can be bought and sold on the stock market. making them more accessible than individual cryptocurrencies. The approval of a BTC spot ETF would allow retail investors, financial institutions and companies to invest in Bitcoin freely.
simple and safe.
The United States closed 2023 with inflation of 3.4%
On the other hand, could increase Bitcoin market liquidity. ETFs typically have very high trading volumes. This would make it easier to buy and sell Bitcoin, which could reduce price volatility.
It is worth highlighting que it is not a replacement or greater competition for the other ways of buying crypto, such as through a cryptocurrency exchange, but it is a new way to position yourself in Bitcoin, which is much more friendly for institutional investors.
What are ETFs?
Los Exchange Trade Funds (for its acronym in English) They work similarly to a Common Investment Fund with the difference that are listed on the stock market. They are a simpler way to diversify your portfolio since they allow you to access different markets and industries.
To be able to buy Bitcoin spot ETFs, like those just approved by the SEC, one of the ways to do so is through an investment account with access to the US market.
How do ETFs work?
They represent a simple way to diversify your investment. When investing in ETFs you access an instrument that seeks to replicate indices or sectors of the economy, through a set of stocks, bonds or other instruments. With a single asset you access a world of opportunities, without the need to manage each one separately.
Advantages:
– They allow the acquisition of a basket of assets with just one transaction, being able to diversify the portfolio with a very low amount.
– They allow exposure to an index or a sector thereof, there are leveraged ETFs and others that behave inversely to the market.
– They also allow exposure to assets by country, diversifying geographically. – Choose different asset profiles, such as bonds, stocks, currencies or commodities.
* Research Analyst at IOL investingonline