The first spot Bitcoin exchange-traded funds (ETF) in the United States has been approved, paving the way for billions of dollars in institutional money to enter the market. On the first day of trading in January 2024, the total volume across ten spot Bitcoin ETFs reached over $4.5 billion. Grayscale Investments’ Bitcoin ETF alone handled more than $2 billion in volumes.
With the influx of institutional capital into the Bitcoin market, concerns have been raised about the implications of a spot Bitcoin ETF for smaller investors. Industry executives and analysts have mixed opinions on this matter. Some see the ETF as a great entry point for non-institutional investors, while others believe that retail investors should stick to owning Bitcoin with self-custody.
Bitwise chief investment officer Matt Hougan views a spot Bitcoin ETF as beneficial for retail investors. He believes that it would lower the costs of accessing Bitcoin, making the market more efficient. Even those who do not plan to use the ETF would benefit from its existence as it would likely reduce brokerage commissions.
However, Jan3 CEO Samson Mow and Quantum Economics founder Mati Greenspan have a different perspective. They suggest that retail investors should stick to buying the underlying asset, which is real Bitcoin held in self-custodial wallets. They argue that there are no advantages and plenty of disadvantages for retail investors to hold Bitcoin ETFs.
Valkyrie co-founder and CEO Leah Wald advises retail investors to approach the launch of a spot Bitcoin ETF with a balanced perspective. While it offers a convenient way to invest in Bitcoin without dealing with the complexities of self-custody, it also introduces the typical counterparty risks associated with all ETFs. Wald emphasizes that the choice between self-custody and ETFs is a matter of preference.
David Gerard, author of the book and crypto blog Attack of the 50 Foot Blockchain, believes that spot Bitcoin ETFs are unlikely to reduce demand for BTC. He is unsure if it creates new demand for Bitcoin, but he doesn’t think it would reduce demand. ARK Invest CEO and founder has predicted that approval of a spot Bitcoin ETF in the U.S. could potentially trigger short-term selling, but remains bullish on BTC price in the longer term.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Samson Mow, Matt Hougan, David Gerard, Mati Greenspan, Leah Wald |
| Companies | Jan3, ARK Invest, Valkyrie, Quantum Economics, Grayscale Investments, Bitwise |
| Currencies | Bitcoin |
| Securities | None |
