Bitcoin’s Place in the Crypto Money Market

Bitcoin was the original cryptocurrency that debuted in 2009 and remains its preeminent example. When the average person talks about crypto, they’re referring to Bitcoin. In fact, people often use the word Bitcoin as a stand-in for all crypto. That’s quite an achievement considering the rapid growth of the competition. Bitcoin was the only player in town in 2009 but now shares the field with over 20,000 competitors.

How Dominant is Bitcoin?

The limited availability of Bitcoin adds to its allure and value. The crypto’s mysterious creator, Satoshi Nakamoto, decided that he wouldn’t copy fiat currency and continue to produce more to meet demand.

Instead, he decreed that Bitcoin would have a limit. Bitcoin is restricted to 21 million coins, 19 million of which are already in circulation.

Today, Bitcoin’s market value is more than that of all other cryptos combined. By late 2023, one Bitcoin held a value in excess of $34,000 USD.

What’s Next for Bitcoin?

Bitcoin was once of interest only to outsiders, people who wanted or needed their financial transactions to be untraceable through traditional means. In contrast, today, you can find Bitcoin in the portfolios of mainstream investors.

Why Are Bitcoin ETFs Popular?

One sign of the mass acceptance of Bitcoin is the success of exchange-traded funds (ETFs) featuring Bitcoin. These ETFs give traditional investors access to Bitcoin but in a recognizable format. They can capitalize on their understanding of ETFs by coupling them with some of the volatility of Bitcoin.

Of course, trading a Bitcoin ETF isn’t the same as dealing directly with Bitcoin. Investors don’t actually own the crypto.

What Are the Two Main Types of Bitcoin ETFs?

A typical Bitcoin ETF, or spot ETF, is an investment fund that tracks and reflects the up and down price movements of Bitcoin. It represents the closest you can get to the crypto’s volatility without owning the currency.

If it’s a futures ETF, the investment is really in contracts. These are contracts specifying a future date at which the crypto will be bought or sold at a previously agreed-upon price.

What’s The Potential Impact of Spot ETFs?

Bitcoin futures ETFs are more readily available than spot ETFs. They’re called spot ETFs because they shadow the spot price of the currency they represent. In fact, the investment funds must legally hold the underlying currency.

Spot ETFs are on the market in Australia, where you can easily follow Bitcoin price, and in other countries but not in the US. That’s expected to change soon when, as experts anticipate, the US finally gives them approval.

The US has long had concerns over the safety of spot ETFs. As a result, it has repeatedly rejected applications from some of the largest investment firms.

However, mega asset manager BlackRock has filed for approval. It’s believed that BlackRock has found a way to satisfy the government’s concerns.

That belief has led other investment firms to resubmit their applications. A ruling is expected in early 2024.

A spot ETF backed by BlackRock is expected to have huge implications for Bitcoin. The purchase of the currency by BlackRock is likely to trigger a new wave of investment. In other words, the world’s number one cryptocurrency is expected to get even bigger.

Disclaimer: This information is of a general nature only and should not be regarded as specific to any particular situation. This should not be taken as financial advice to buy, trade, or sell cryptocurrency or use any specific exchange. This is not intended for use as investment, financial or legal advice as each individual’s need will vary.

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