What do Bitcoin ETFs mean for Bitcoin? (Intro Learning)

Background: When the SEC approved 11 Spot Bitcoin ETFs, this did a couple of things to the crypto space.

Remember, Spot ETFs: These funds actually hold Bitcoin.

Shortly after these were approved by the SEC, the price of Bitcoin was decreasing slightly. A big reason for this was one of these funds had some “rules” in there that allowed them to trade an ETF before the Spot ETFs were approved. Once approved, the rules the fund Grayscale had, were not favorable compared to the other 10 ETFs that had “better rules”.

So, essentially, people in Grayscale were paying more in fees than Blackrock, (who’s a Titan) for the same product and moved their money to cheaper, better funds doing the same thing.

The approval by the SEC is also seen as a positive in the Bitcoin space, which helps it get closer to wider acceptance.

Historically with gold, as it became more accessible, people demanded it more over time.

Overall, it raised the price of Bitcoin, since people (who previously before couldn’t/wouldn’t access Bitcoin) were buying these ETFs and, in return, the companies had to go and buy Bitcoin with that money, which pushed the price up (along with some hype). As more people buy ETFs you could expect that it should help push the price up. As people sell them, the price should be going down.

8 out of the 11 have Coinbase as their Custodian, which is someone who will hold and store the Bitcoin, for a fee. Some people in the space view this with caution because they believe that Coinbase will become too centralized in the decentralized space.

Hong Kong is also looking positive on approving a Bitcoin Spot ETF soon, possibly widening the exposure.