Bitcoin Doesn't Need an ETF- Key is Futures Market and Organic Adoption
The Bitcoin ETF has been a point of focus for the cryptocurrency investment community for the past two years. VanEck Vectors and other investment houses have come into the limelite for their progressive approach to a Bitcoin ETF, but the SEC approved ETF is not necessary for Bitcoin's future. The futures market on CME, Bakkt and ICE along with organic adoption of cryptocurrencies are much more important for the future of these digital assets.
What will a Bitcoin or cryptocurrency ETF do for the cryptocurrency market? Is this the golden catalyst that will propel our cryptocurrency investments skyward? You can already buy Bitcoin on Fidelity and TD Ameritrade. You can buy Bitcoin on Square's Cash App, you can purchase a cryptocurrency portfolio on Abra, and any large cryptocurrency exchange from Bittrex to Binance can give you access to a basket of digital assets. Will a Bitcoin ETF really grant more access to the fintech and Wallstreet crowd?
According to Investopedia, the ETF market has a total marketcap of $4 trillion. The ETF asset class began in 2008, and has grown at a rapid clip. An ETF is similar to a mutual fund that trades on the market, and gives investors access to an asset class easily. The owners of the ETF product, usually large financial firms including BlackRock, Wells Fargo, Bank of America and others must buy or hold the underlying assets that makeup the ETFs, and in theory the increase in volume will boost the underlying asset.
Bitcoin is a commodity, and it so follows that it trades on the futures market. Ethereum will follow soon in Bitcoin's footsteps. The CFTC has declared that Bitcoin and other cryptocurrencies are commodities, and that they be regulated as such. Bitcoin has joined oil, gold, wheat and pork bellies on the futures market, and that is where it is finding legs. Bitcoin futures trade over $370 on the Chicago Mercantile Exchange (CME), and futures are trading on Bakkt and ICE.
Organic adoption and the current futures market trajectories are more important to the future of the cryptocurrency market. The growth of the cryptocurrency market has been amazing, and will likely continue this growth. As Wallstreet and Mainstreet adopt Bitcoin as their medium of exchange and trade, we don't need a Bitcoin ETF, and the futures market can pick up the slack. The allure of an SEC approved ETF on the $4 trillion ETF market is real, but not necessary at this time due to the organic growth of Bitcoin and its availability for both Wallstreet and Mainstreet.
Picture from Pixabay.