Three Compelling Reasons Why a Spot Bitcoin (BTC) ETF Approval Really Matters, According to Bitwise

cryptonews.com:

There are three compelling reasons why a spot Bitcoin Exchange Traded Fund (ETF) approval really matters, crypto index fund manager Bitwise argued in a recently shared threat on Twitter.

“Approval would make it vastly easier for investment professionals to gain exposure to bitcoin,” Bitwise argued, noting that “ETFs are among the most popular and efficient vehicles to access key markets or investment themes”.

Secondly, Bitwise notes that ETFs hold structural advantages that offer better price efficiencies over other products.

They are likely referring to the existing suite of Bitcoin futures ETFs that already trade in the US.

These ETFs have an imperfect relationship to the Bitcoin price as a result of roll-over costs, an inefficiency that a spot ETF would solve.

Finally, Bitwise states that “a spot bitcoin ETF would likely be seen by many as a regulatory stamp of approval”.

“It would communicate that the market has matured and is now ready for institutional investors to enter with confidence”.

Optimism that spot Bitcoin ETF approvals are close has been a major theme in the market in the past two months.

Major Wall Street heavyweights like BlackRock, Fidelity and Vanguard all filed for ETFs in mid-June, helping to propel the Bitcoin price higher from around $25,000 to fresh yearly highs near $32,000.

However, following the onset of buyer exhaustion in the low $30,000s and amid increased profit-taking, Bitcoin failed to mount a sustained push into the $30,000s.

Macro headwinds, with long-dated US yields rising to fresh multi-decade highs on bets that US interest rates will remain higher for longer in the coming years thanks to the US economy’s continued outperformance, have since weighed heavily on the Bitcoin price.

Bearish