What Is A Bitcoin ETF?

Many ask the question “What Is A Bitcoin ETF”?

Before we address what is a Bitcoin ETF, let us first define ETF.

An ETF is an acronymn for “exchange-traded fund”.

Today an ETF is traded on major stock exchanges like the New York Stock Exchange (NYSE) or Nasdaq.

Buying and selling an ETF is performed in the same manner as if you are trading individual stocks.

An ETF is a collection (or “basket”) of tens, hundreds, or sometimes thousands of stocks or bonds in a single fund.

If you’ve ever owned a mutual fund or an index fund, then owning an ETF is similar beause it has the same built-in diversification and low costs. You don’t need to buy the stocks. You buy into the fund and let the fund managers manage your account.

What this means is that investors can buy and sell their holdings in this exchange-traded funds (ETF) to other investors on the the stock exchange.

What is A Bitcoin ETF?

Basically, a Bitcoin ETF is one where the underlying asset is Bitcoin. This means that when you purchase Bitcoin ETF, you’re not purchasing actual Bitcoins.  You  are holding the Bitcoin ETF in your portfolio and the Bitcoin ETF simply tracks the real-time price of Bitcoin. The difference is when you invest in a Bitcoin ETF, you have the luxury of trading Bitcoins without the pain of buying Bitcoins on Cryptocurrency Exchanges and storing it.

How Will A Bitcoin ETF Affect BTC ?

The application of ETFs by Wallstreet firms is a clear indicator that the big money is coming into the cryptocurrency market. As the Security Exchange Commission (SEC) approves more and more Bitcoin ETFs, they would be giving the green-light for mainstream investing in all other cryptocurrencies. The impact is that there could potentially be trillions of dollars injected into the cryptocurrency market.

One major reason that the SEC rejected the Winklevoss brothers’ ETF application last year was because the Bitcoin markets were “unregulated.”  At least this is the line we’re hearing.  One school of thought is that the government entities were still trying to figure out this Bitcoin thing out.

Late last year, Bitcoin Futures began trading on the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE). In addition, big investment banks such as Goldman Sachs who launched a Bitcoin Trading Desk earlier this year, are putting their toes into the cryptocurrency waters.

CBOE’s VanEck/SolidX proposal has the most buzz among investors when you look at all of the Bitcoin ETF applications currently under review, since it would be settled in actual bitcoin and is expected to have a positive impact on Bitcoin’s price

Do you think a Bitcoin ETF will be approved by end of 2018? Comment Below.

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Faith Sloan “QueenWiki” 
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Queen Wiki

Faith Sloan also known as "Queen Wiki" is a cryptocurrency advocate, evangelist and educator. She has been a software engineer for 40 years and builds Decentralized Apps (DApps) on the Ethereum blockchain and plays with Tech toys. When she is not teaching, researching and writing about Cryptocurrencies and the Blockchain, she's advising companies and traveling the world while feeding her eating hobby.