, a year ago
Last week was a good week for Bitcoin despite the fact that the market came crashing down over the weekend. Fidelity International is one of the biggest investment companies in the world and started a new Bitcoin ETF in Canada. While there are already several exchange-traded products and fonds available on the international market, this particular ETF was notable for good reason.
In this article, we are going to answer the question of what a spot Bitcoin ETF really is and why some analysts are really excited about it.
When the first Bitcoin ETF started in the US a few months ago everybody got excited since it was considered a historical event. Over the last four years, the Security and Exchange Commission turned down all applications for an ETF in the United States.
But the brand-new product was not what everybody had expected, since it was a so-called futures ETF. Such an ETF is very different, because it doesn’t buy or hold Bitcoin in its portfolio but is rather representing the value of Bitcoin. It allows investors to hold BTC in their portfolio, but it doesn’t increase the amount of money that is flowing into the spot market.
And this is what we are potentially looking at with Fidelity’s ETF. It is a real spot ETF with “physical” replication and therefore more money is flowing into the markets. Since the SEC is still not fond of the idea of a Bitcoin spot ETF on the US market, the new product simply launched in Canada.
Many analysts believe that spot ETFs could open a flood gate of cash that could burst into the market. The positive side effect of such an inflow would be the increasing demand for BTC. Since a physical replicating ETF needs to hold the BTC it would need to buy them from the market. With increasing demand, the price could possibly take off.
This is of course a very optimistic view and it would take a lot of cash to move the price in the right direction. Another thing that comes into play is the increasing education about Bitcoin. An ETF doesn’t allow investors to hold BTC for themselves and use it for transactions. The “digital gold” is so attractive because the network cannot be controlled by a single entity. By investing in Bitcoin ETFs investors lose the most precious advantage.
Mar 30, 2023
There are true believers out there who think that the world can be saved with and through Bitcoin. Some argue that they are completely out of their minds while others listen and try to figure out if this perspective reveals at least an ounce of truth. Sticking to the narrative that many Bitcoiners are following, the truth is that institutions like the ECB have become obsolete and do more harm than good.
Mar 29, 2023
Zero-knowledge (ZK) proofs have been tested on Ethereum and they are an exciting new idea that can also improve Bitcoin. A non-profit organization from Switzerland based in Zug is one of many other organizations that is working currently on making ZK-proofs available on Bitcoin. According to several media reports, they finally had a breakthrough in delivering the technology. Let’s take a look at what ZeroSync has developed for Bitcoin.
Mar 27, 2023
MicroStrategy has done it again! The company bought Bitcoin and while this doesn’t come as a surprise, the circumstance of the recent move is remarkable. Many critics have pointed out that investment in Bitcoin is risky. Most recently, the market proved that banks can be more volatile than Bitcoin. MicroStrategy took advantage of this fact and made another strong move that drove media attention to the company.
Mar 27, 2023
Tim Draper is well-known for his conviction about Bitcoin. The billionaire bought 30,000 BTC in 2014 during the Silk Road Bitcoin auction. An investment that turned out to be fruitful, to say the least. Because of his conviction, Draper is more than biased when it comes down to the mother of all cryptocurrencies. On the other hand, his success can be interpreted as an indicator that Draper might know a thing or two that other investors don’t. Recently, Draper advised on how business owners and managers should deal with the banking crisis.
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