A New Bitcoin ETF Is On The Way
It’s been a wild ride for the crypto-currency Bitcoin but it has managed to bounce back from long-term lows and is now more valuable than gold. What’s driving the craze into the digital currency? Growing and widespread acceptance of it and other alternative forms of money and the prospect of a new ETF based on the same. The new ETF is under consideration by the SEC with a decision expected soon.
The allure of Bitcoin for its users is simple, an easy to access currency free from government intervention or manipulation. The allure for investors is a little less easy to understand until you consider 2 things. The first is that Bitcoin has been able to outperform most currencies over the long and short terms. The second is that recent years have seen volatility subside as the cryptocurrency gains status as a safe-haven investment.
The new ETF, named the Winklevoss Bitcoin Trust and traded (prospectively) under the ticker symbol coin, will be listed on the NYSE if it gets approval. The Winklevoss twins, Tyler and Cameron, as you may already know, hail from the earliest days of Facebook and have since entered into the real of Bitcoin. The two have been heavily invested in the currency and have weathered the storm only to come through even richer than before.
Many analysts see this as a critical juncture for the currency. It has skyrocketed to new all-time highs in recent months and may continue to do so if the ETF is approved. If not, interest in the currency may wain and take its value down as well. One outcome may be that the SEC will make no ruling at all, which would result in approval by default. This is considered highly unlikely so expect to see something from the SEC soon.
The problem with approval as many see it lies in liquidity. As it stands there are no methods in place for shorting Bitcoin and the number of places to buy them are limited. The Catch 22 is that approval of the ETF would provide everyday retail investors and money managers easy access to a what has been described as a “yuge” pool of liquidity, that would be shortable.
The take-away for us binary options traders is that we can expect to see increased volatility in the near term. This of course means enhanced trading opportunities for savvy traders. We recommend eToro for Bitcoin trading. The platform supports forex and CFD trading, social and copy trading for any style of trader.