Bitcoin ETFs: Another Key Growth Driver

The Bitcoin market demonstrates the new upbeat mood as expected. Resistance at $7700, mentioned earlier, which had been holding the price back for months, surrendered. Bullish attempts were strong enough to push the price higher, to a new barrier at $ 8000. Bitcoin hasn’t been so expensive since May. Now, everyone without exception wonders, what will happen next?

We have already considered the idea that a new rally in the bitcoin industry will begin with the inflow of new money into the system from institutional investors. But is there any reason to believe that major investors are really interested in stepping into this market? Yes. Given that the launching of crypto-based exchange traded funds (ETF) has been the most discussed topic in the recent months, we believe that the next bitcoin hype phase is coming, and it may lead to the renewal of the record highs. To date, the cryptocurrency market remains closed to investment funds since they can’t work with the instruments it offers in a present unregulated environment.

In other words, the lack of proper regulation keeps investors from being larger than ordinary speculators. However, times change and today traders have a "guiding light", which they can keep the focus on. The next important event that is about to happen is the expansion of the Coinbase’s custodial services outside the US, as well as the previously mentioned launch of new ETF contracts.

Researchers at IronWood Group consider the possible ETF approval by the US Securities and Exchange Commission (SEC) a good base for growth above $ 20 thousand. The numbers are quite simple. As soon as such contracts appear in the market, more than 40 million investors from around the world with a total capital of half a trillion dollars will start investing in bitcoin. Taking into account that the current market capitalization of bitcoin is slightly more than $ 300 billion, the tripling of its rate is almost inevitable. Also, the BTC/USD may as well repeat the success of its rival - gold.

Let’s recall, that back in 2003 the first gold ETF began trading on the world’s stock exchange, which led to a 300% increase in its rate. The fact that the BTC ETF does appear is not merely an empty talk. SolidX, which Bitcoin ETF was rejected by the SEC last year, has partnered with VanEck to create a new investment fund. Taking that VanEck controls the turnover of 70 traditional ETFs with a total capitalization of $ 45 billion, there is no doubt that both of them will be engaged in the development of a new direction.

As for the custody service, it will offer institutional investors a safe and secure storage of crypto assets. The Coinbase service itself partners with Electronic Transaction Clearing (ETC), a SEC-registered broker-dealer and FINRA member subject to regular independent audits.

Taking all the above said, the BTC/USD is clearly up for a new upside move and it can reach the $10 000 anytime soon. Let’s just hope that the U.S. Securities and Exchange Commission won’t militate against the creation of new stock instruments.