Momentum for the idea of an bitcoin ETF linked to bitcoin is back in a big way. That is prompting some market observers to speculate on how such a fund, assuming it comes to life, will affect prices of the largest digital currency.
Indeed, bitcoin prices are rebounding as the Securities and Exchange Commission (SEC) conducts a public comment period on bitcoin ETFs.
In June, ETF sponsors VanEck and SolidX, a fintech company engaged in the bitcoin ecosystem, revealed plans for the VanEck SolidX Bitcoin Trust ETF (XBTC). That fund is targeted at institutional investors as it would debut with a share price of $200,000. That product would track an index linked to a group of bitcoin trading desks, possibly allaying some of the SEC’s prior concerns about funds linked to physical bitcoin.
To this point, the SEC has not approved any of issuers’ efforts to launch bitcoin ETFs. Recently, the Winklevoss brothers, the brothers that are looking to introduce the first U.S. bitcoin exchange traded fund, the Winklevoss Bitcoin Trust, were awarded a patent that some believe could help that ETF finally come to life.
Hope Springs Eternal for Bitcoin Bulls
Predictably, bitcoin bulls largely favor an ETF linked to the king of cryptocurrencies, a sentiment largely rooted in the notion that the fund would stoke higher prices and wider acceptance of digital currencies.
“Should the approval for a Bitcoin exchange-traded fund succeed, the cryptocurrency market could potentially experience a never-before-seen influx of capital as institutional capital, speed traders, and accredited investors move into the crypto space for the first time,” reports CryptoSlate.
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Earlier this month, the SEC approved plans for public comments on bitcoin ETFs, which could pave the way for the funds to finally come to life. However, some market observers believe that if the SEC does not approve bitcoin ETFs in the coming months, the effort could be pushed off until 2019 and beyond.
“Notably, the availability of a Bitcoin ETF within the US would make simple, streamlined Bitcoin purchases available to institutional investors, less technically adept investors, and speed traders. The impact of speed traders, who typically execute extremely high volumes of trades, could potentially have a significant impact on the price of Bitcoin — as evidenced by the presence of speed traders in the European Bitcoin ETF market,” according to CryptoSlate.
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