To better understand the context behind the crypto market’s focus on a spot ETF, it’s useful to draw some useful historical parallels to the creation of gold ETFs and their impact on the gold market.
Related to the increased accessibility would be an increase in liquidity and trading volume in the bitcoin market. Increased liquidity and further diversifying the asset’s investor base could help stabilize prices and reduce price volatility caused by illiquid market conditions. This could also shift the investor base from tech-savvy retail investors and crypto enthusiasts to more mainstream, longer-term real asset investors looking for diversification from fiat currencies.
An ETF structure also provides a more familiar and regulated investment vehicle that institutional investors are comfortable using, which could lead to more hedge funds, asset managers and pension funds allocating capital to bitcoin.
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