Exploring how Bitcoin ETFs and Grayscale will affect cryptocurrency

Spot Bitcoin ETFs are now a reality. Investors are headed to their preferred asset management platform to diversify their portfolios. Bitcoin was in a dark space before January 10, 2024. It has now been tagged with due recognition, enabling investors to explore digital assets. What keeps the sphere on the edge is the actual impact that it can have on the future of cryptocurrency.

For starters, approving Bitcoin ETF applications has opened the door for other crypto assets to submit ETF applications. Ether ETF is now the most anticipated product, followed by XRP and other tokens. Needless to add, suspicions have yet to be validated by platforms that will be spearheading the charge with approval from the US Securities and Exchange Commission.

One question that is gaining momentum is how much of it will affect the future of cryptocurrency. Bitcoin ETFs have had little impact on the price of BTC. Bitcoin was once poised to surpass the mark of $50k, an inch closer to its ATH of $65k by the end of 2024. While those predictions are still alive in the optimistic minds of crypto enthusiasts, the BTC price is not performing as it should be.

BTC was last seen exchanging hands at $39,798.28. It is closer to the psychological level, or resistance mark, of $38,000 than the next milestone of $65k, or even $50k, for discussion. Analysts have said that it is a part of the price correction that was natural to happen at some point.

Grayscale enters the picture by converting GBTC to a Bitcoin ETF. The conversion of GBTC, or Grayscale Bitcoin Trust Fund, into the product above, has enabled the platform to provide a product that allows consumers to access on-demand share redemption and continuing creation. This is consistent with the typical elements of ETFs.

Market manipulation is one of the remaining challenges for the Bitcoin ETF. Many people assume that the product’s largest holders have the power to affect market dynamics simply by coordinating their purchasing and selling activity. This is accurate to a large extent, depending on how previous events have unfolded.

JP Morgan and the SEC agreed to a settlement in 2012 after being accused of manipulating gold futures contract pricing. Before that, in 2008, a group of energy companies was found to have violated basic principles by allegedly manipulating oil futures prices to affect an ETF that tracks oil prices.

Miners are on target, too. It has been understood that a loophole allows large ETF issuers to pressure miners into adopting specific practices. This takes the autonomy of miners and potentially influences them to manipulate block rewards and transaction fees.

Environmental, Social, and Governance (ESG) factors may increase Bitcoin’s market value. It proposes the implementation of the green-mined Bitcoin approach to encourage sustainable practices.

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The future of cryptocurrency is pretty bleak, for it is highly exposed to volatility. Many more factors may be crucial in affecting what happens in the digital sphere.

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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