According to reports, the SEC may decide again at the end of October 2021 whether to approve, reject or delay the Bitcoin ETF listing application. Bloomberg ETF analyst James Seyffart said that he believes that approval is very likely. “The SEC and its chairman Gensler have no reason to make positive comments on the Bitcoin futures ETF based on the 1940 law at the end of September. The opposite decision will be made after a month.” It is reported that as of the beginning of October, a total of 9 Bitcoin futures ETFs are awaiting SEC approval.
This article was published by Vernacular Blockchain on 11th, 2019. Through this article, readers can briefly understand what is ETF and what is Bitcoin ETF?
What is an ETF?
The full name of ETF is Exchange Traded Fund, which translates to trading platform trading fund in Chinese.
Everyone may be confused about what a fund is, but when it comes to stocks, everyone should be familiar with it.
When ordinary investors want to buy stocks, they must have a certain understanding of the development prospects and capital status of the company behind the stocks, and then choose the stocks to buy from thousands of stock types. This is too costly for buyers. More time and energy.
The original intention of the emergence of funds is to simplify the investment process of ordinary investors . You only need to hand over the money to a fund manager, and use the money for investment purchases through the fund manager. After the deadline, you only need to pay a certain service fee to the fund manager, and the remaining principal and income belong to the investor. .
Compared with retail investment, this saves time and energy and reduces investment risks. However, compared with stocks, investors have less freedom to buy and sell, and investors cannot change these assets at will.
On top of this there has been ETF, which is equivalent to the fund given the function of a particular stock, so that the fund like a stock may be listed on the trading platform, you can freely buy sell. An ETF is an index fund, a basket of stocks that track the trend of the stock market, and packaged together into a fund.
It can be understood as a kind of package. When a user invests in an ETF, it is equivalent to purchasing each product in the package. Such a basket of stocks can effectively prevent investors from stepping on thunder and diversify risks. And buying this package is equivalent to buying the entire board, saving time for researching each stock.
What is a Bitcoin ETF?
After talking about ETF, then Bitcoin ETF is well understood. It is a trading platform trading fund based on Bitcoin. If you buy a Bitcoin ETF, you are buying Bitcoin indirectly. What you have is a fund that can track Bitcoins instead of you owning Bitcoins, but both have the same income.
Bitcoin ETF tracks the price of Bitcoin. When the price of Bitcoin ETF increases, the price of Bitcoin increases. Conversely, if the price of Bitcoin decreases, then the price of Bitcoin ETF decreases.
People may have questions here. Are Bitcoin and Bitcoin ETFs not the same? Isn’t Bitcoin ETF just buying and selling Bitcoin here? In fact, the only difference between the two is: we don’t have to worry about the bitcoins in our wallets being stolen by hackers, and we don’t need to worry about where our bitcoins should be stored. This is a kind of promotion on the technical level. After purchasing a Bitcoin ETF, we no longer need to learn how to operate Bitcoin on a computer.
What is the impact of Bitcoin ETFs?
1. Lower the investment threshold and attract a large number of retail investors. These retail investors usually refer to people who are interested in bitcoin investment but are subject to computer technology.
2. Provides a channel for institutional investors to invest in Bitcoin: it will bring more funds into the market and will generate more demand for derivatives.
For example, through the Bitcoin ETF, traditional fund companies can also indirectly hold Bitcoin. When an investor buys a traditional fund, the fund manager can use a portion of the investor’s funds to purchase a small portion of the Bitcoin ETF. In this case, it is equivalent to increasing the amount of funds to invest in Bitcoin.
3. If the ETF application is successful, it means that it is included in supervision and its legal compliance has been officially recognized, which will also bring a positive boost to the development of Bitcoin and even cryptocurrencies.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/popular-science-understanding-bitcoin-etf-in-five-minutes/
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