It's the topic of the moment.
In the world of Exchange-Traded Funds (ETFs) dedicated to Bitcoin, the fever linked to the possible approval does not seem destined to subside.
On the contrary.
In fact, the number of those who declare themselves in favor of this investment instrument is growing.
Paying attention to the "rumors" circulating on the floors of financial companies, the Securities and Exchange Commission (SEC) – the US federal body responsible for supervising stock exchanges – would still have a margin of time ranging from three to six months to take a final decision on the approval of these financial instruments.
Operators' expectations But why does this step fuel so much expectation among operators and investors? To better understand the dynamics linked to this turning point, we spoke to Mauro Grandinetti (in the photo above), Managing Director of Algo Capital, an investment company specializing in digital assets and tech.
Let's start from the basics.
In the financial context, an ETF is an investment fund traded on a stock exchange and designed to faithfully replicate the performance of a specific asset class or a specific stock index, i.e.
the grouping of listed companies based on a common characteristic.
But what advantages do they offer if included in an investment strategy? Let's start by saying that ETFs offer considerable flexibility to investors.
Their versatility concerns both real-time pricing, like any other stock, but also their ability to offer the opportunity to diversify the portfolio, spreading the risk across various assets.
The latter aspect is advantageous for those who want to invest for the long term, as it helps limit the impact of short-term market fluctuations.
Then there is the transparency factor.
With EFTs, investors are always aware of how their money is invested, as they are tied to the composition of the index they claim to track.
This provides clear visibility into the underlying assets and allows investors to make informed decisions about their investment strategies.
So let's get to Bitcoin.
What's new? We are facing a turning point which, if approved, would represent an epochal transition in the field of cryptocurrencies.
The request to create a Bitcoin ETF takes on truly important implications.
Starting with the fact that the first step was taken by BlackRock, the largest asset management company in the world, with assets under management of around 10 trillion dollars.
Suffice it to say that in the past, the SEC has approved most of its requests.
But let's go back to the Bitcoin ETF: if it were approved it would make it easier to invest in Bitcoin, opening up a world of cryptocurrencies and digital assets to ordinary people too.
This would push many to invest in cryptocurrencies, without purchasing Bitcoin directly on dedicated platforms but through their bank or on more traditional platforms.
So you could invest in Bitcoin without having to own it directly, right? Correct.
Not to mention that if the Securities and Exchange Commission approves this ETF, it is not excluded that many others could follow for other currencies.
The epochal transition is right here.
The approval of this ETF would change the way people currently invest in cryptocurrencies, not to mention that it would very likely generate an increase in interest in these assets among a wider audience.
Approval is therefore only a matter of time.
The passage is very delicate.
In this sector everything is possible and the variables that could intervene are extreme, but still real.
Today we are witnessing a significant consensus on the part of the most accredited operators and institutions towards the creation of ETFs linked for now to Bitcoin, creating ideal conditions for access to the world of cryptocurrencies to a wider audience of investors.
At present, for a traditional investor, learning to use a cryptocurrency platform represents a sometimes insurmountable barrier.
With the addition of an ETF, management would become much simpler, becoming more efficient with more savings.
What investment volumes are we talking about? Is it possible to make a prediction? This is a very difficult question.
It is impossible to make estimates, but from what we read in the specialized press there is a lot of anticipation and I wouldn't be surprised if there were movements amounting to hundreds of billions.
As an example, Steven Schoenfield, the former managing director of BlackRock and current CEO of MarketVector Indexes, told the crowd at the Digital Asset Summit in London last Tuesday that the impending approval of a bitcoin ETF could bring $200 billion to products investment in bitcoin in the short term.
BTC's current market cap is around $500 billion.
It's the topic of the moment.