Notwithstanding that the most recent round of Bitcoin (BTC) ETF denials by the US SEC are absolutely an obstruction, once launched, crypto ETFs will essentially change the game for digital currency.
To properly know how the rollout of a BTC ETF could affect the Cryptos price, it's useful to do a comparison to gold-linked ETFs. In the year 2003, the price of gold powerfully soared following the introduction of the first ETF.
This is because investment access to the valuable metal became smoother and retail investors gained a lot of exposure and could diversify their portfolios without buying and keeping physical gold. Currently the SDPR GoldShares exchange traded fund (ETF) is among the largest ETFs in the crypto market with more than $35 billion under management.
Moreover, an ETF rollout could produce a vast instream of institutional money into the digital currency market. Between Goldman Sachs proclaiming the launch of its BTC trading platform, to JPMorgan rolling out a patent for DLT-powered payments, high institutional adoption in the digital currency space has so far been seen in 2018.
Alex Reinhardt, Venture investor, business development expert, serial entrepreneur, Co-Founder and CEO of ELVN Crypto Messenger and Wallet, stated to Coinidol:
“Official acceptance of the Bitcoin ETF can significantly affect the liquidity flow into the cryptomarket. And the sooner this happens, the sooner the cost of cryptoassets will be resumed. Right now cryptomarket had frozen in anticipation of clear positive signals from the regulators, and ETF approval will be such a signal.”
The changing era of crypto is convoluted, therefore, anybody that needs to purchase or trade digital currency has to be able to access digital currency exchanges and deal with digital currency wallets.
These particular tasks are convoluted, perturbing and also cause investors to face security risks. Add to this major concerns around the absence of insurance safety and custodianship, and you eliminate a massive population of potential investors.
"By some estimates, there is $10 billion of institutional money waiting on the sidelines to invest in digital currency today," Co-Founder and CEO at Coinbase Brian Armstrong said in a blog post last year.
The primary item that he claimed was preventing institutional investors from getting involved was "the existence of a digital asset custodian that they can trust to store client funds securely."
While the US SEC's Hester Peirce is decorously in the pro-ETF camp, it is obvious that the SEC is searching for intense transaction monitoring by a Bitcoin ETF which is based on a regulated market of big size.