- While institutions favor physically-backed exchange-traded funds.
- Governments and other organizations can no longer ignore Bitcoin’s existence.
The cryptocurrency community and the Bitcoin market are already expecting the approval of physically-backed Bitcoin exchange-traded funds (ETFs) in the near future. According to the latest predictions, the long-awaited innovation would result in massive institutional inflows in the bitcoin market.
Gold exchange-traded funds (ETFs), which contribute $10 trillion to the market’s worth, are adding gasoline to this fire. Bitcoin ETFs, on the other hand, may not have the same effect as gold ETFs. Physically-backed exchange-traded funds (ETFs) are popular among investors because tangible assets back them. Gold exchange-traded funds (ETFs), backed by gold, and the Bitcoin ETF will be as well.
Institutional investors could purchase a product backed through precious physical metal on the day gold ETFs, introduced to the market. Holding ETF shares allows traders and investors to “own” gold without purchasing physical gold bars.
Institutions Have Joined the Race
Bitcoin, on the other hand, is a different scenario. Individual traders and investors nowadays prefer to buy Bitcoin directly from a centralized or decentralized exchange.
While institutions favor physically-backed exchange-traded funds (ETFs), derivative-based ETFs continue to be a hazardous investment. It is almost certain that when Bitcoin ETFs stop trading, “new money” will pour into the cryptocurrency market. Since the beginning of 2017, most institutions have joined the race, with over $200 million in Bitcoin being invested each week. While the price action changes the trend, we may infer that the institutions have arrived in the marketplace.
It is, however, a historic moment for the whole cryptocurrency sector, demonstrating that governments and other organizations can no longer ignore Bitcoin’s existence.
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