1/22/2024 - economy-and-finance

Private regulated investment institutions and accounts will now drive the Bitcoins market

By gustavo neffa

Private regulated investment institutions and accounts will now drive the Bitcoins market

Bitcoin was born as a means of electronic payment between pairs, that is, between two people, to be able to carry out and facilitate economic transactions by creating an electronic currency outside the reach of governments and central banks.By competing with the central banks, regulations and prohibitions did not delay. But in a short time, the world financial system began to adopt and accept it as a success that really is what it is today. The banks, the mutual funds with their respective investment managers and the other institutional investors are watching in Bitcoin today as an ally instead of an enemy, and therefore began to accept it gradually.One of the major steps it should take, and without renouncing its principles of non-direct regulation, was to allow traditional investment accounts to integrate them into traditional investment accounts. The pioneers were online brokers, who began to accept duality in accounts regulated by FINRA in the USA and in different places in Europe and Asia the possibility of buying cryptocurrencies in individual investment accounts. Sometimes with some strategic alliances, but with some restrictions, such as PAXO with Interactive Brokers for U.S. resident, sometimes directly as Quantfury may be. I use both platforms and are excellent both.Two worlds are playing and living now. The Chicago Mercantile Exchange purse had already allowed the operation of two futures of operational Bitcoins.Deeper is still the integration after the big step it took in January 2024 the US Stock Exchange and Values Commission (SEC), which is the largest regulatory body in the American market (the largest in the world) that approved the first group of Bitcoin ETFs in sight (or “spot”) that began to quote in the American bag. I declare that ETFs were approved in view because an ETF had already been approved but done with future Bitcoins, ProShares Bitcoin Strategy ETF Fund (BITO). The agency gave green light to 10 ETF administrators, including BlackRock, Invesco, Fidelity, Grayscale and Ark Invest.Approval has marked a major step towards cryptocurrency, as it will provide large institutional investors and their individual customers with ways to gain exposure to Bitcoin through existing financial instruments trading in a regulated stock exchange.One of the great benefits is that the growth and distribution of Bitcoin in the U.S. because there were already usable ETFs outside the U.S.: A total of 5 countries and 3 autonomous territories gathered up to now the 20 funds quoted in Bitcoin pouch in view of the world, which were growing from 2020 most. In Canada, 7 Bitcoin ETFs are traded in sight as Purpose Bitcoin ETF (BTCC) of Purpose Investments, traded in the Toronto Stock Exchange (TSX) and released in February 2021, which was the largest Bitcoin ETF by January 2024. Also successful were the CI Galaxy Bitcoin ETF (BTCX.B) of CI Global Asset Management or The Bitcoin Fund (QBTC) of 3iQ Digital Asset Management released. Germany has a single Bitcoin ETF in sight, the ETC Group Physical Bitcoin (BTCE), which was released in June 2020 and has 100% BTC exposure. Brazil has two funds quoted in Bitcoin stock in view: one is the Hashdex Nasdaq Bitcoin ETF (BITH11) fund, launched in August 2021 and catalogued as the first Green Bitcoin ETF in Brazil, due to its investment approach in carbon credits to reduce its carbon footprint and QBTC11, the first Bitcoin ETF in Latin America, with a launch in June 2021 the position of the active Management administrator. Australia has the Global X 21Shares Bitcoin ETF (EBTC). The list is completed with other impositive lax jurisdictions on the one hand and innovative and flexible on the other hand as Liechtenstein, Jersey, Guernsey and the Cayman IslandsThe release of Bitcoin ETFs in the US. give you greater credibility of cryptocurrencies as an asset class, and especially that Bitcoin could start appearing in conventional portfolios, where many more retail investors can gain exposure, as well as large institutional fund managers can add it to their investment funds.The ease and tranquility of owning Bitcoins has been a theme since its creation due to hacks in virtual wallets with “hot” storage (i.e. on the internet) and multiple bans by governments. When investing in an ETF of Bitcoins it is no longer necessary to depend on a vulnerable hardware for your storage. Investors do not need to address the difference between hot and cold wallets,” which store digital tokens. Instead, they can simply buy an ETF from one of the many regulated asset administrators who launched their own ETFs.These are the 10 funds created and their respective tickers to operate them:

  • GBTC Grayscale Bitcoin ETF
  • IBIT Ishares Bitcoin Trust
  • FBTC Fidelity Wise Origin Bitcoin Fund
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  • BTCW Wisdomtree Bitcoin ETF
  • _ Valkyrie Bitcoin Fund
  • HODL Vaneck Bitcoin Trust ETF
  • EZBC Franklin Bitcoin ETF
  • ARKB ARK 21Shares Bitcoin ETF
  • BITB Bitwise Bitcoin ETF
  • DEFI Hashdex Bitcoin Futures ETF
Between the ten ETFs, Those who recorded the largest volume were the Grayscale Bitcoin ETFs (GBTC), BlackRock (IBIT) and Fidelity (FBTC).The Grayscale background is the largest, as it became an ETF from an extraburst fideicomiso that already had more than US$ 28 Bn in assets.The Hashdex fund is currently a product of future bitcoins, and although a rule change has been approved to include the fund as a Bitcoin product in sight, the fund registration statement to convert it is still under review with the SEC.The volume traded in ETFs that follow the price of Bitcoin has significantly increased in its first days of operations, a sign of a strong demand after being approved by the SEC.As a market with a lot of volatility, they also began to list several applauded ETFs and that draw or sell in the discovered Bitcoin 8 including some conversely applauded). ProShares accompanied the ETFs issue to have a five new ETF approval request, including a so-called ProShares UltraShort that doubles the inverse exposure to Bitcoin (-2x). Also is the ETF ProShares of Bitcoin Ultra for those who anticipate a significant price increase, providing twice the exposure (+2x). ProShares will also offer moderate reverse exposure options through the ETF Bitcoin ShortPlus and ETF ProShares Short Bitcoin. The other proposal is the Bitcoin ProShares Plus ETF (+1.5x) for a moderate positive exposure based on the Bloomberg Galaxy Bitcoin index. Tuttle Capital Management has 6 ETF proposals of bitcoin packed and inverse calls T-REX seeks daily investment results that are inverse or long-termly worded up to 150% (for product 1.5X) and 200% (for product 2X).The approval of the Bitcoin ETFs to the account generated optimism around similar funds supported by Ethereum. Grayscale also has a structured fund in the form of a trust already listed in the US, but its market could dynamize much further ahead.Buy with rumor and sell with the news: Bitcoin quotation fell after the ETF approval announcement, honoring the previous sentence. But I think there is a great potential for Bitcoin to continue to rise by incorporating itself into regulated portfolios and avid returns portfolios where there were no such positions, even more if we think that the year 2024 will mark the beginning of the bassist cycle of interest rates: lower cost of opportunity, discount rate of long-term fund flows lower and - hence - higher current value, need to invest in higher year returns assets and high appetites.

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gustavo neffa

gustavo neffa

I'm Gustavo Neffa. Director of Economics and Finance at FinGurú. Partner and director of Research for Traders, leading a team of market analysts. I spent the last 24 years in the financial sector in both domestic and foreign entities, having occupied the post of Senior Research Analyst in Macrosecurities of the Banco Macro and the BBVA Banco Francés, as well as economic analysts with the economist in chief of the BBVA Banco Francés. I am also a professor in Corporate Finance, Investment Portfolio Management, Financial Asset Valuation, Valuation of International Investment and Finance Projects in various MBAs and postgraduate courses in Buenos Aires and in the interior of the country and professor of the MBA of the UNLP and the UNNE of Financial Asset Assessment and the postgraduate degree in the UBA Capital Market in agreement with ByMA. Co-director of the UNLP Advanced Finance Programme.

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