Steemit Crypto Academy Contest / S15W3 - Bitcoin ETF! What Impacts?

What is an ETF?
An ETF or rather, exchange-traded fund, is a type of investment fund that can be bought and sold on a stock exchange. It is similar to a mutual fund, but it has some major important differences. An ETF tracks a specific index or basket of securities which means it's a way to get varied disclosure to a wide range of investments. ETFs are well known for their low fees and easy trading nature. They're also a good option for investors who wish to broaden their portfolios without having to pick a particular stock.

Just like the above explanation of the term - "Exchange-traded fund (ETF)", the same mechanism also applies to that of the Bitcoin ETF. So here, I have a detailed publication about the Bitcoin ETF which entails it meaning, how it works and it impacts. Let's explore this concept together!

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A Bitcoin Exchange-traded fund (ETF) is a type of investment fund that tracks the price of Bitcoin. It's more like a mutual or index fund but instead of tracking different stocks, it tracks the price of Bitcoin. The Bitcoin ETF allows investors to get disclosure to Bitcoin without having to buy and store Bitcoins or having to personally own the cryptocurrency yourself. It is a very convenient and effective/efficient way to invest in Bitcoin.

How does it Differ from owning Bitcoin directly?

A Bitcoin ETF is very much different from own Bitcoin directly, because you're not actually buying and holding the cryptocurrency, instead you're buying shares of a fund that tracks the price of the asset (Bitcoin). The benefit of this ETF is that it's an easy and more convenient way than buying and storing the main cryptocurrency. However, the cons of this, is that you don't actually own the asset/cryptocurrency (Bitcoin) and you're not able to use it for transactions or store it in a private wallet.

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The approval of a Bitcoin ETF by the SEC would have a very huge impact and influence on the Cryptocurrency market. First, it would provide a coordinated way to invest in Bitcoin, which will embolden more investors to get involved. It would also formulate Bitcoin as an investment asset and could lead to advanced adoption and acceptance of the Cryptocurrency.

The price of Bitcoin would likely rise as a result of great demands and increased concern from corporate investors. In all, the approval of a Bitcoin ETF by the SEC would be a very positive thing with mighty impact on the Cryptocurrency market.

Why did it just fall after this approval?

Apparently, as crypto investors and traders all around the world were anticipating the approval of the Bitcoin ETF on the 10th of January 2024, there were predicted pump in the price of Bitcoin price but the opposite was what surfaced (a dump in the price of Bitcoin). Some days back @bossj23 made a publication about why the Bitcoin is declining after the recent approval of the ETF. This is the link to read about what he said.

In my own opinion and research, here are few possible reasons why the price of Bitcoin may have fallen after the SEC's approval of the ETF.

• One possible reason could be that some investors may have been buying Bitcoin in anticipation of the approval, and when the news of the approval was declared, they chose to sell and take their gains..

• Another reason could be that the news of the approval may have led to enhanced inspection and regulation of the Cryptocurrency market, which may have spooked/alarmed some investors.

Overall, the short-term price change are very hard to predict and can be be altered by many different factors.

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The approval of a Bitcoin ETF by a major financial authority like the SEC would be a great step towards licensing/legitimization of cryptocurrencies. For a reason, it would provide a coordinated and recognized avenue for investors to access cryptocurrencies.

Furthermore, it would mark that top financial authorities like the SEC are beginning to take cryptocurrencies seriously and see them as a legal/legitimate assets (possession). This would increase the value and how legitimate the Cryptocurrency market is, because of how institutional investors will get involved.

One of the main advantage of decentralized governance is that it allows for community members to have a say in process of making decisions. The introduction of a Bitcoin ETF could possibly, centralize decision making power, which interfere with the core principles of a decentralized Blockchain like STEEM. However if a SEC-approved Bitcoin ETF were to come in to become a major player in the cryptocurrency market, it could maybe lead to a greater degree of government regulation and decisions which could impact the functioning of the STEEM Blockchain..

How might these two approaches complement or diverge in investors' perspectives on assets management?

The key difference between the SEC approved Bitcoin ETF and the decentralized governance of the STEEM Blockchain is the level of centralized control operation. The ETF would be regulated by a centralized (fixed ) authority while the STEEM Blockchain is decentralized and therefore governed by the community.

Investors, may view the two approaches differently, based on their priorities and risk tolerance. Some may prefer the security and stability of a centralized regulated ETF, while others may go for the decentralized nature of the STEEM Blockchain.

One one hand, the initiation of a Bitcoin ETF may result to advances in the level legitimacy of cryptocurrencies in the eyes of traditional investors, which could potentially lead to a more vast interest in digital assets. Although, it's also possible to say that the centralized control of the ETF could be seen as contrary to the decentralized principles of the STEEM Blockchain.

In conclusion, the ETF is a very good way to be part of a investment. So applicable to Bitcoin, the Bitcoin ETF also helps investors to invest in the assets, without personally owning them but buy funds that track the price of the assets. Although, it has it pros and cons.

Understand the benefits of the ETF, as well as it implications so that you can make informed decisions based on individual investor's needs and goals.

Note: This publication is just written to give out my knowledge of the concept of the Bitcoin ETF and it applications. I'm not a financial advisor and any suggestions you may have seen are not financial advices. Please DO YOUR OWN RESEARCH (DYOR).

Thanks for reading.

I invite @us-andrew, @sol02 and @impersonal.