During the next months, the SEC could be approving the first Bitcoin ETF ever. This can happen as early as August the 16th, but some other commentators hint that the decision could be delayed for September. Some experts are predicting an approval by the SEC, and crypto enthusiasts are very bullish about it. But can this ETF, in case of being approved, spark a major bull run in the market?
Bitcoin ETF – A New Bull Market?
At the end of 2017, the crypto bull run that we experienced in the market was related to rumors regarding Bitcoin futures contracts that were going to be offered by the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE).
This time, the price of the famous virtual currency moved from under $4,000 and reached $20,000 dollars just some months later in December. Since then, Bitcoin lost more than 65% of its price and now it is being traded around $7,900.
But at the moment, the crypto community is very positive about a possible Bitcoin ETF. An ETF is an ‘Exchange Traded Fund’ that tracks the performance of an asset or a commodity. They are traded like stocks and the price moves during the whole day.
In the past, several other crypto-related ETFs have been rejected by the SEC. Numerous attempts to create a Bitcoin ETF have constantly failed during the last years. The main problem, according to the regulatory agency, is that the market is still unregulated, there is an important volatility, and retail investors may be exposed to a very risky market.
But for some experts, this time is different. The latest application could be approved due to the fact that the ETF would not allow investors with less than $200,000 place their funds in the ETF.
According to several experts in the crypto field and the CBOE, the latest proposal known as VanEck SolidX Bitcoin Trust ETF meets all the required regulatory criteria. If the ETF is approved, important financial corporations could start to place their money in the crypto world.
ETFs would allow institutions and investors gain exposure to the crypto market in a more regulated and formal environment. The market is requesting for these instruments, but the offer is very limited. If wealthy investors decide to place their funds in the crypto world, a new bull run could start in the market.