Bitcoin ETFs: All that glitters is not gold?

Bitcoin ETFs have arrived, courtesy of the approval granted by the US Securities & Exchange Commission. Traders can access platforms of asset managers like BlackRock and Fidelity, and begin their journey with BTC effective January 10, 2024. However, there are certain aspects that the community is still trying to deal with – transparency, hope, and hesitation.

Transparency takes center stage

On-chain transparency following the approval of Bitcoin ETF applications has been given priority. It had to, given worries about market manipulation and misuse of the mechanism’s use to escape unlawful fund transfers within and across national borders. Bitwise, for one, has taken the lead by sharing a wallet address with the public for BITB – Bitwise Bitcoin ETF.

The objective is to enable every trader to verify holdings and flows of funds at any time directly on the blockchain. Several prominent names in the sphere have applauded this move, including the likes of Balaji Srinivasan.

The CTO at Coinbase has said that it is indeed an important step in the direction of onchain accounting. Nate Geraci, the President of ETF Store, has said that they simply love the initiative, adding that it demonstrates a perfect example of the TradFi-DeFi bridge building, with each standing for traditional finance and decentralized finance, respectively.

Bitwise’s introduction of the wallet address to the public for BITB marks the beginning of a new trend for other asset managers to follow. It is likely to fuel investors’ confidence and potentially attract new ones.

Institutional appetite on the rise

Several big players have expressed their commitment to Bitcoin. This includes Fidelity and BlackRock. They continue to back the network and its native token at a time when it has successfully absorbed the selling pressure created by Grayscale. As it continues to unload the share, the pace has considerably reduced for the market to make a recovery in the days to come.

BlackRock holds 44,000 BTC tokens, and Fidelity has its holdings booked at 40,000 BTC. Meaning, they have vast exposure to the token with the utmost confidence in it.

That confidence is only obvious since BTC touched $47,000 in January 2024. That was after the announcement about ETF approval. The BTC price momentarily inched up to that mark. Bitcoin is currently exchanging hands at $40,060.05. This depicts a jump of 0.35% in the last 24 hours. The same cannot be said for a continuous rise, though.

There is a rise in institutional price, but to an extent that keeps BTC on the surface. Hesitation persists among many traders and institutions, most of whom are either reviewing their chances of introducing a new product or keeping a distance from it until it becomes the new normal.

Fidelity, BlackRock, and other asset managers could uptick their holdings. BTC is trading at a lower value, making it ideal for long-term trading. Needless to say, short-term gainers may be disappointed, assuming they have set the standards way too high.

Hesitation amidst enthusiasm

Some big names that have decided to maintain the distance are Vanguard Group and Merrill Edge from Bank of America. Their reason was based on the grounds of regulatory clarity and high volatility.

A spokesperson from Vanguard Group has said that they do evaluate their offerings periodically, and it is unlikely that they will launch their Spot Bitcoin ETF on the platform. The spokesperson has also downplayed the possibility of introducing any product that is related to the Bitcoin ETF.

Merrill Edge declined to comment when the media attempted to reach them for one. But, they have said that they are evaluating their chances of providing the service. Charles Schwab Corp. has decided to let go of its fear and proceed with the offering of trading in a Bitcoin ETF.

Looking forward

There is hope pertaining to the Bitcoin ETF, but there is also some hesitation among asset managers. It is safe to conclude that it is primarily about maintaining the balance between innovation and being cautious about any offering that is extended to traders. All eyes are now on how the landscape turns out as the Bitcoin ETF ventures on a new path.

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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