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Bitcoin ETF Approval- the Inevitable? What will happen?

The much-anticipated prospect of a Bitcoin ETF approval has captured the attention of both seasoned investors and crypto enthusiasts alike. The question looms large: What will unfold once the regulatory green light is granted?

Spot Bitcoin ETF?

What is Spot Bitcoin ETF?

An exchange-traded fund (ETF) is an investment fund that you can trade on a stock exchange, similar to regular stocks. These funds typically follow specific indices, sectors, commodities, or other assets, offering an easy way to diversify your investments affordably.

A spot Bitcoin ETF specifically tracks the current market value of Bitcoin, unlike other ETFs that might track Bitcoin futures or derivatives. By investing in a spot Bitcoin ETF, you’re essentially entrusting your money to an investment company that deals with Bitcoin-related assets on your behalf.

This allows you to gain exposure to Bitcoin without directly buying, storing, or managing the cryptocurrency. This investment method offers peace of mind since professionals in financial fields manage the investments for you, although these ETFs do come with additional management fees.

Different types of assets can be held within a Bitcoin ETF, such as Bitcoin futures contracts, stocks of companies involved in the Bitcoin industry, or even carbon credit futures to offset Bitcoin mining’s environmental impact.

However, it’s essential to note that these details are speculative, and the actual composition of a Bitcoin ETF upon its launch will be disclosed by the owning company. Also, this information isn’t financial advice. If you plan to invest, thoroughly research before committing your funds.

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Who is Blackrock?

BlackRock is a global asset manager and fiduciary to clients, offering funds, insights, and solutions for various investment goals and preferences. It is the world’s largest asset manager, with $9.42 trillion in assets as of June 30, 2023. It also runs iShares, the largest U.S. family of ETFs, with nearly $4 trillion in assets under management.

A spot Bitcoin ETF is an investment vehicle that allows ordinary investors exposure to the price moves of Bitcoin in their regular brokerage accounts. Unlike Bitcoin futures ETFs, a spot Bitcoin ETF invests directly in Bitcoins as the underlying asset, not derivatives contracts based on their prices.

BlackRock filed for SEC approval of a spot Bitcoin ETF on June 15, 2023, along with several other financial firms. However, the SEC has not yet approved any spot Bitcoin ETFs, citing concerns about fraud and manipulation in the cryptocurrency market.

BlackRock’s proposal for a surveillance-sharing agreement, which would help monitor trading activity and customer identity, was reportedly deemed insufficient by the SEC. Therefore, it is unclear when or if BlackRock will be able to launch a spot Bitcoin ETF.

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Spot Bitcoin ETF approval- What will the market react?

Why is this Spot Bitcoin ETF approval so important?

The approval of a spot Bitcoin ETF is important for several reasons:

  • It would be the first spot Bitcoin ETF in the U.S. to be accepted by the SEC. A spot Bitcoin ETF tracks the current price of Bitcoin directly, rather than using futures contracts or indirect exposure. This is different from the existing Bitcoin futures ETFs in the U.S. market, which invest in Bitcoin futures contracts that expire and roll over periodically, creating additional costs and risks for investors.
  • It would provide a regulated and accessible way for mainstream investors to invest in the digital currency, without the hassle of buying and storing Bitcoins directly.
  • It would enhance the liquidity and efficiency of the Bitcoin market, as more investors and traders would be able to buy and sell Bitcoins through the ETF shares.
  • It would foster institutional participation and market validation for Bitcoin, as more reputable and influential financial firms would offer and endorse the product.
  • It would improve the market transparency and reduce regulatory risk for Bitcoin, as the ETF would have to comply with the SEC’s rules and standards and share information with the regulators and the public.
  • It would potentially have a positive effect on Bitcoin’s price, as the increased demand and adoption of the ETF would create upward pressure on the value of the underlying asset.

Will the Spot Bitcoin ETF approval shake the crypto market?

The spot Bitcoin ETF has not been approved by the U.S. Securities and Exchange Commission (SEC) yet, but it is likely to happen soon. This could have a positive impact on the Bitcoin market, as it would increase the liquidity, accessibility, and legitimacy of the cryptocurrency.

A spot Bitcoin ETF is an investment product that would allow investors to buy and sell shares that track the current price of Bitcoin directly, without the need to own or store the cryptocurrency themselves.

The approval of a spot Bitcoin ETF by the SEC is expected to have a significant impact on the crypto market, both in terms of price and volatility.bitcoin etf approval win

Some of the possible effects of a spot Bitcoin ETF are:

  • It would increase the demand and adoption of Bitcoin, as more mainstream and institutional investors would be able to access the digital currency through a regulated and convenient vehicle. This could potentially drive up the price of Bitcoin, as the supply of the cryptocurrency is limited and decreasing over time.
  • It would improve the liquidity and efficiency of the Bitcoin market, as more investors and traders would be able to buy and sell Bitcoins through the ETF shares, rather than relying on crypto exchanges or other platforms. This could reduce the price volatility of Bitcoin, as the market would be able to absorb larger orders at stable prices.
  • It would enhance the transparency and legitimacy of the Bitcoin market, as the ETF would have to comply with the SEC’s rules and standards and share information with the regulators and the public. This could reduce the regulatory risk and uncertainty for Bitcoin, as well as the influence of crypto whales and market manipulators.
  • It would create a positive feedback loop for the crypto market, as the success of the spot Bitcoin ETF could pave the way for more ETFs and other products based on other cryptocurrencies or crypto-related assets. This could further expand the crypto ecosystem and innovation, as well as attract more capital and attention to the space.


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However, some analysts also caution that the spot Bitcoin ETF may not have the impact that the market is assuming, or that it may have some negative or unintended consequences. For example:

  • It may face competition or cannibalization from the existing Bitcoin futures ETFs, which are already available in the U.S. market and have attracted billions of dollars in assets. Some investors may prefer the futures ETFs over the spot ETFs, due to their familiarity, liquidity, or tax advantages.
  • It may introduce new risks or challenges for the ETF providers and the SEC, such as the custody, security, and valuation of the underlying Bitcoins, or the potential for arbitrage, fraud, or hacking. These issues could affect the performance, reliability, or trustworthiness of the ETF, and expose investors to losses or liabilities.
  • It may increase the volatility or complexity of the Bitcoin market, if the ETF involves a “cash creation” structure, which means that the ETF provider would create new shares by buying Bitcoins from the market, rather than delivering Bitcoins to authorized participants. This could create more demand and price swings for Bitcoin, as well as more tracking errors or discrepancies between the ETF and the underlying asset.

Therefore, the impact of a spot Bitcoin ETF on the crypto market may depend on various factors, such as the design, structure, and size of the ETF, the regulatory environment and oversight, the market conditions and sentiment, and the investor behavior and preferences.

A spot Bitcoin ETF could be a game-changer for the crypto market, but it could also bring new challenges and uncertainties.

KEYRING PRO Wallet- Keep your Bitcoin safe!

To prepare for the upcoming event of Spot Bitcoin ETF approval, you should equip yourself with a secure and user-friendly crypto wallet.

While an ETF allows you to invest in assets related to Bitcoin without needing to own Bitcoin directly, it’s worth considering that there’s a high possibility of Bitcoin’s price surging after the request for a spot Bitcoin ETF is approved. Therefore, purchasing and holding Bitcoin is also crucial.

To create a Bitcoin wallet using KEYRING PRO Wallet, follow these steps:

  1. Download KEYRING PRO Wallet.
  2. Choose to create a new account.
  3. Select the Bitcoin blockchain.
  4. Create your account.

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