BlackRock and WisdomTree’s bids for a Bitcoin ETF have reintroduced legitimacy around the cryptocurrency as an asset class. Based on the analysis by Ilan Solot, the reasons for these recent ETF proposals and their effects on the overall cryptomarket should cross-checked as including three overlapping pillars – hedging, front-running and reputation management.
In addition, the deregulation of restrictions of physically holding cryptocurrencies has made investors more comfortable potentially utilizing them as portions of their portfolios. Many are looking into ETF investments to help manage and cope with inflation & instability in global banking markets. Furthermore, the introduction of Bitcoin ETF’s may translate to easier access with a more favorable manner in terms of taxes.
Consequently, the launch and legislative approval of a Bitcoin ETF will spark more sustainable liquidity driven to by public and institutional investments in the crypto market. Yet again, the hopeful launch of a Bitcoin ETF, potentially allowing conditional assets to enter this fragile yet spike space of digital coins is still in the balance – dismissing the ETF filings from the SEC effectively reduced Bitcoin price 4.12% in minutes.
