How a Bitcoin ETF Could Ignite a Bitcoin Price Boom

We all know what an exchange traded fund (ETF) is, right? It’s a fund allows investors to easily buy a diversified pool of assets. These assets could be bonds, commodities, mutual funds — maybe even bitcoin, soon.

As reported by CNBC:

Would-be bitcoin ETF investors are in wait-and-see mode as the Securities and Exchange Commission reconsiders whether to allow the first bitcoin exchange-traded fund to come to fruition. To the dismay of many, the SEC rejected the Winklevoss Bitcoin ETF (COIN) in a March 10 decision, citing a lack of regulation and surveillance-sharing agreements between exchanges.

‘Though hopes are high that the bitcoin ETF will eventually be approved — public comments on the fund have been largely positive — analysts aren’t confident the SEC will turn around so soon after its previous negative ruling and suddenly give it the green light.

If a bitcoin ETF is approved, it will likely cause the price of the digital coin to rocket up.

Think about it.

Not only would speculators jump in as they think more investors would potentially buy the coin. Institutional investors along with retail investors might also want to get some exposure to this highly talked about commodity.

A lot of analysts talk about the passive bubble in the stock market. This essentially means investors have given up trying to beat the market. So they in pile into index funds and ETFs instead.

But because so many investors are following a passive strategy, it bids up those assets within the index or ETFs to dizzying heights.

Could the same happen to bitcoin? Should you get in now, before it happens?

Maybe you just want to know more about the secret world of bitcoin. If that is the case, click here.


Härje Ronngard,

Junior Analyst, Money Morning

Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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