January 10, 2024 will go down in history as the day the floodgates opened for spot bitcoin exchange-traded funds (ETFs) in the United States.
In a landmark decision, the Securities and Exchange Commission (SEC) approved more than a dozen spot bitcoin ETFs from major financial institutions such as BlackRock, Ark Invest, Van Eck, Invesco, and Valkyrie.
This regulatory clarity and institutional adoption will likely catalyze the next big crypto bull market.
Unleashing a wave of new demand
These new bitcoin spot ETFs remove key obstacles to widespread investment in digital assets. Investors no longer need to directly own or custody bitcoin to gain price exposure. Instead, they can simply buy shares of these SEC-approved funds in their existing brokerage accounts and benefit from bitcoin's upside potential.
Importantly, the launch of these bitcoin spot ETFs will generate significant new demand for the cryptocurrency. Fund managers will need to purchase substantial amounts of bitcoin to start their funds and back stocks.
Analysts at Standard Chartered Bank estimate between $50 billion and $100 billion in capital inflows in the first few days. Additionally, if institutional and retail appetite for these funds is strong, managers will need to continue accumulating bitcoin to support further growth. This new base demand could strongly impact prices. The bank is targeting the possibility of $200,000 per currency by 2025.
Accelerate institutional adoption
The approval of bitcoin spot ETFs will also generate a flood of positive media coverage and encourage their adoption by banks, hedge funds, pensions, endowments and more. He crypto-futures?utm_source=PR&utm_medium=PR&utm_campaign=Why+spot+bitcoin+ETF+approvals+are+the+next+crypto+bull+market+catalyst” rel=”nofollow noopener” target=”_blank”>crypto The industry has been seeking this high-level regulatory clarity for years.
Now that the SEC effectively deems bitcoin mature and acceptable for general investment, many previously hesitant institutions may devote capital.
Just as the launch of the first gold ETF by ETF Securities in 2004 sparked a surge in interest and investment in the precious metal, bitcoin ETFs are likely to significantly broaden their appeal and drive prices higher.
Riding the Bull Run with Leverage
For traders looking to profit from this impending cryptocurrency bull run, derivatives platforms like PrimeXBT, Binance and ByBit offer potential solutions. These platforms allow users to trade cryptoassets with leverage without the need for custody. While they all offer leveraged trading, PrimeXBT stands out for its ultra-low fees, which start at just 0.05% per trade. This surpasses even spot exchange pricing models.
By aggregating liquidity pools across multiple trading venues, leading crypto derivatives platforms are able to offer competitive pricing and tight spreads, even during high volatility conditions. Traders should evaluate factors such as fees, leverage limits, risk management tools, platform security, and customer support when selecting the best option for their strategy.
As the new era of bitcoin spot ETFs unfolds in 2024 and beyond, flexible derivatives trading will allow investors to capitalize on both bull runs and correction periods. With robust risk management, derivatives platforms provide the most efficient way to capture opportunities in this expanding universe of digital assets. By opening up cryptocurrencies to mainstream capital, this week's SEC decisions represent the coming of age for bitcoin.