What’s Next for Bitcoin ETFs? Top Analyst Weighs In on New SEC Approval

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As a seasoned analyst with over two decades of experience in financial markets under my belt, I must say that this latest development in the crypto market, specifically the approval of Bitcoin options by the SEC, is indeed a significant milestone worth noting. While it’s not entirely unexpected given the recent Nasdaq approvals, it does remove a substantial hurdle for institutional investors, paving the way for increased participation in the crypto space.

Eric Balchunas, an analyst at Bloomberg, has remarked on a fresh, significant milestone in the cryptocurrency sector once again.

Last Friday, the United States Securities and Exchange Commission (SEC) expedited its approval process for 11 Bitcoin-linked exchange-traded funds (ETFs), allowing them to begin trading options based on real-time Bitcoin prices on the New York Stock Exchange (NYSE).

Based on Balchunas’ statement, it was no great shock that the SEC granted the same approval to Nasdaq more recently. However, this development is still good news for the broader cryptocurrency sector.

It wasn’t unexpected, given the recent approval of something similar for Nasdaq, but it’s still positive news because the SEC has been a significant challenge. We’ve heard encouraging reports about the remainder of the process, although the precise date for listing is yet to be clarified.

— Eric Balchunas (@EricBalchunas) October 18, 2024

Nevertheless, it’s important to note that the full listing process might take longer due to the fact that the fresh choices are yet to be approved by the CFTC, according to Balchunas.

Among the approved funds are:

  • Fidelity Wise Origin Bitcoin Fund (FBTC.Z)
  • ARK21Shares Bitcoin ETF
  • Invesco Galaxy Bitcoin ETF (BTCO.Z)
  • Grayscale Bitcoin Trust (GBTC.P)
  • iShares Bitcoin Trust ETF (IBIT.O)

This development represents a significant stride for institutional investors, since Bitcoin options offer them a versatile and streamlined method for managing and enhancing their exposure to Bitcoin through risk management and potential increase in returns.

These choices provide investors with an opportunity to either guess or protect themselves against potential price fluctuations in Bitcoin, all within a controlled market environment. This approach also necessitates a smaller initial investment compared to buying and trading the actual Bitcoin itself.

Although this progress benefits the cryptocurrency market, it’s important to note that the listings of these options are yet to be official as they are still pending approval from the Commodity Futures Trading Commission (CFTC).

Previously, the Securities and Exchange Commission (SEC) granted approval for BlackRock’s iShares Bitcoin Trust on Nasdaq. Now, with the recent approval for the NYSE, this is an extension of a growing pattern that aims to enhance institutional involvement in Bitcoin by providing more regulated avenues for investment.

On a Friday, Bitcoin (BTC) peaked at $69,000, breaking through a significant barrier at $68,000 that previously acted as resistance.

Bitcoin ended the third quarter with a slight increase of 1.00%, bouncing back after it dipped below $50,000 in August. As we move into the fourth quarter, the market’s outlook appears optimistic, bolstered by historical trends indicating an average gain of about 49.9% during Q4 since 2014.

This optimism is strengthened as a result of a change in market conditions after the Federal Reserve lowered its interest rate by 0.5%.

The reduction in supply (of Bitcoin) sparked increased market involvement, causing the accumulated open interest for Bitcoin to climb by 6%, nearly reaching $27 billion. Bitcoin’s value soared above $62,000, indicating a robust bullish sentiment, and other cryptocurrencies mirrored this trend, showing better performance than U.S. stocks, which experienced volatile fluctuations.

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2024-10-19 13:04