The attractiveness of cryptocurrencies for investment purposes could be affected by changes in tax laws. At the same time, the number of coins that Spot-Bitcoin-ETFs would need to hold to be profitable could make them attractive targets for cybercriminals. Bitcoin and other cryptocurrencies rely on digital keys and internet-based storage and transmission. Major security breaches at Bitcoin-Spot-ETFs could lead to the theft of thousands or even millions of Bitcoins. Unlike cash in a bank, stolen Bitcoins can be quickly and anonymously transferred and are very difficult to recover.
The question of whether Bitcoin-ETFs are a positive development is controversial among supporters of the digital currency. Edward Snowden, for example, sees the fact that traditional financial companies want to bring Bitcoin products to the market as a weakening of the basic idea and the emancipatory potential of cryptocurrency. For Bitcoin, this means “a form of subordination, a kind of submission – and a process of taming,” Snowden said in October at the Bitcoin fair in Amsterdam.
Other crypto advocates see the approval as a necessary step to bring Bitcoin out of its niche existence. Regulatory acceptance and regulation, in their view, contribute to the cryptocurrency being viewed by traditional financial institutions as a legitimate instrument and functioning as a normal investment and means of payment.
Investors around the world could soon be buying Bitcoin-ETFs on the stock exchanges. The American Securities and Exchange Commission (SEC) is expected to decide on the approval of the first exchange-traded Bitcoin fund in a few days. The most important questions and answers are discussed.
Bitcoin has been on the rise for some time. Last Tuesday, the digital currency rose above the $45,000 mark for the first time since April 2022, achieving a performance of around 160 percent over the past 12 months. This development is driven, among other things, by an expected decision by the US Securities and Exchange Commission (SEC). The SEC is currently examining a new exchange-traded fund (ETF) that can directly invest in Bitcoin. If the fund receives approval, it would be the first Spot-ETF denominated in Bitcoin. The SEC has until Wednesday to decide on this.
What is new about the Bitcoin-ETF? The SEC has already approved some Futures-Bitcoin-ETFs. These are based on Bitcoin futures contracts, i.e., leveraged products that replicate Bitcoin prices. Their value is indirectly derived from these contracts and can thus be influenced by various factors. Spot-Bitcoin-ETFs, on the other hand, are based on current prices, actually buy and sell Bitcoins, allowing investors to speculate without having to deal with the technical challenges of a Bitcoin wallet or securing access keys. Instead, they can easily buy or sell ETF shares at any time. Bitcoin-ETFs lower the barriers to entry for numerous investors, making the cryptocurrency tradable on the world’s largest exchanges.
Bitcoin-ETFs also open up the option for institutional investors such as pension funds or asset managers to invest in digital assets. This was not previously possible for regulatory reasons. Several well-known asset managers such as Blackrock, Invesco, or Wisdom Tree have applied for the approval of exchange-traded Bitcoin funds. So far, the SEC has rejected all applications due to the risk of possible market manipulations. However, insiders familiar with the approval process have told the crypto portal “Coindesk” that they are very confident about the approval.
The exact date of the decision has not been announced.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 🇳🇱 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Nelly Keusch, Edward Snowden |
| Companies | SEC-Gremium, Reuters, 21 Shares, Börsenaufsicht, State Street |
| Currencies | Bitcoin |
| Securities | None |
