Discussion about Bitcoin ETF and why it will be a turning point for the cryptocurrency market

in #bitcoin5 years ago


In coming September, we will see a decisive event with Bitcoin and the cryptocurrency market. It is the SEC's decision whether or not a Bitcoin ETF fund is allowed. The proposal to set up the Bitcoin ETF was launched by the VanEck SolidX Bitcoin Trust, which was proposed by the two SolidX and VanEck companies to the SEC. If this decision is adopted, it could be a big turning point for the cryptocurrency market. The reason why the brothers look at the bottom.

What is ETF Fund?

The ETF (Exchange Traded Fund) is a form of fund investing in the index. The ETF portfolio consists of structured securities at each fund's level. Accordingly, investors do not have to choose their own shares that can directly buy fund certificates of the ETF. This type of investment is passive investing.

Let's take the example of gold for simplicity (and also for Bitcoin). A gold ETF would buy a lot of gold and then make investment papers, divide it into shares and sell it to the people. People who buy a stake in ETF gold mean they buy their shares in gold investment funds rather than they own gold.


In this way, people who want to invest in gold can avoid the risk of loss of money, the cost of preserving gold and the complex taxation of buying real gold, instead they can buy shares in ETF funds. gold. Since they arre just gold shares, people do not need to have large capital. So with enough capital and avoiding cost categories, ordinary people can completely invest in gold, thanks to the ETF.

Impact of ETF funds on Gold?

Since 2003, the Rothschilds and several German banks have introduced ETF gold, offering gold investment opportunities to ordinary people. They collected a lot of gold and made gold shares for sale to the people.

Since then many gold ETFs have started to appear, they are beginning to collect large amounts of gold in the world. Gold is becoming increasingly scarce as buyers are increasingly unable to find the gold they need (as most ETFs have already accumulated), and they can not buy from ETFs because they only sell certificates rather than real gold and according to the legendary supply-and-demand theory, the price of gold has increased dramatically.


So will Bitcoin ETF increase Bitcoin prices?

The answer is yes and no.

You may say I'm crazy, but it is true to say both yes or no. This is because the Bitcoin ETF fund will cause sharks to try to collect Bitcoins as much as possible before being bought by ETFs Fund, and there are only 21 million BTCs in the world. Bitcoin is not immune to the supply and demand rule as gold, and the high possibility that it will be bull run, this time it may be even stronger than the 2017 because of the shark consolidation. Simple theoretical thinking is that.

But in fact it is very uncertain, Bitcoin has much similarity to gold, but until now it has not been determined where Bitcoin's instinct value is. Gold is a precious metal, and its preciousness has been imprinted in the human mind for thousands of years. What's about Bitcoin? Born in 2008, so far it is still vague about it. Representing blockchain, technology changing the world? Not at all, bitcoin is old and full of errors, can be completely replaced by another coin. In gold, it holds the position of monopoly.


In addition, the legal framework around Bitcoin and cryptocurrency is still ambiguous, the Bitcoin ETF fund appears to be subject to SEC regulatory scrutiny, as the Bitcoin price will not be as good as it once was. It can take up to a few tens of percent change a day, and worse than a little bit of gold today.

Anyway, September is still an important month, let's wait and see. If you have a good idea then leave a like, and if you have any thoughts on the event please comment below. Thank you.

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