Bitcoin and cryptocurrency ETFs are poised for approval by the SEC, potentially as soon as January 12th. This would allow mainstream investors easier access to investing in cryptocurrencies without needing to directly buy and custody crypto assets. Many experts predict significant new capital inflows which could push Bitcoin's price higher, although some caution that a "sell the news" drop is also possible.
Exchanges like NYSE and CBOE are gearing up for the new ETF products by modifying their rules and fee structures. Proposed fees range from 0.25% to 0.8%, with some ETFs offering promotions like 6 months free. Trading could commence January 12th if approved. Additional costs like premiums and spreads could make total ownership costs even higher in the 8% range initially.
Seed capital for the ETFs is rumored to be in the billions of dollars, exceeding many analysts expectations. These funds would need to purchase Bitcoin to back the ETF shares, becoming a source of new demand. However, there may also be outflows from existing products like GBTC as investors switch to the new ETF structure.
Opinions are mixed if approval will drive Bitcoin immediately higher or lead to a post-catalyst "sell the news" drop. Some see support around $38k if selling pressure materializes, but a bounce higher is also very possible given the macro backdrop and amount of sidelined cash primed to enter the market. Longer term, most agree expanded mainstream access helps validate cryptocurrency as an investable asset class for years to come.
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