The news of last week and subsequent price action following the news made sure to wake up crypto investors across the globe. As Bitcoin surged past 37.000 dollars and Ethereum crossed 2100 dollars, crypto hodlers finally began to see lights at the end of the tunnel in what was the most exciting week so far this year.
As Bitcoin began the year trading at 16.531 dollars, it is at the time of writing trading at 36,847, representing a 122.8% gain. The bigger narrative remains this: For the first time since May of 2022, when Bitcoin fell below 40k, it is starting to close in on that number again and with good reason. The overall interest for crypto is picking up and in that regard we wanna remind you of our personalised OTC trading service where you can buy almost any coin or token you want - even with USD. Learn more here.
So, what happened and why is it important?
In short and as we highlighted in our newsletter on the 24th of October it all comes back to this: Spot Bitcoin ETFs. The Security and Exchange Commissions (SEC) first window of approving one or more Bitcoin spot ETFs began last week and according to Eric Balchunas, Senior ETF analytics at Bloomberg, there is now a 90% chance of approval(s) within January 10th next year. Not only that, but seemingly out of nowhere, the head of The Securities and Futures Commission of Hong Kong stated to Bloomberg in a report published last week that they are considering “retail-investor access” to such spot ETFs providing regulatory concerns are met.
In all, this means that we could now potentially be looking at spot ETFs both in the US and the Asia-Pacific region region. As there already exists Bitcoin futures ETFs, the potential Bitcoin spot ETFs marks a significant change in the world of crypto. Spot ETFs will first and foremost track the price of Bitcoin more accurately as they would hold the digital asset directly. It also strengthens the credibility of Bitcoin and simplifies the way for potential investors to get exposure to Bitcoin in contrast to “complicated” futures contracts with Bitcoin as the underlying. These contracts expire at some point or must be traded for new contracts. Also, they do not hold Bitcoin directly.
As for the potential Bitcoin ETFs themselves, the most anticipated one is provided by Blackrock, the world's largest wealth manager with over 9 trillion dollars under management. To put their assets under management (meaning the total market value of the investments they manage) into context, it amounts to over 6 Norwegian “Oil funds”. In addition to this, Blackrock also filed an application to the Nasdaq last week where they seek to introduce a spot ETF which holds Ethereum.
Moreover, this further signalises the change in perception when it comes to cryptocurrencies and blockchain in general. In 2017 the C.E.O himself of Blackrock, Larry Finch famously said during a talk that: “Bitcoin is an index of money laundering”. Now, only 6 years later, he is doing his best to be the provider of one while saying crypto could “revolutionise finance”.
We believe so as well. Since our inception, our number one goal has always remained to: “..build products for the financial infrastructure of the future.”. An important part of this is granting you as a customer access to as many legit and interesting projects as possible. As the market evolves - so will we and this is why we announced our partnership with Huddlestock last week which you can read more about here. This consolidates our position to make NBX a fully secure and reliable platform where you can trade anything from regular stocks, commodities, cryptocurrencies and NFTs.
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This text is intended to inform and is not an investment recommendation.