As the world is heading towards absolute digitalization, the transformation of real money to digital money is also quick. With cryptocurrencies, this change is even faster. One aspect of crypto coins is the Bitcoin ETF. Bitcoin futures ETFs are Bitcoin-related assets that aim to mimic the price movements of Bitcoin.
The real intent behind these ETFs is to expose newbie traders and other investors to the world of cryptocurrencies without needing to own them. As such, these are traded on traditional exchanges rather than crypto exchanges. Trading an ETF lets you focus on trading an asset rather than focusing on learning blockchain, mining key storage, and other factors.
With the rise in the price of Bitcoin, Bitcoin ETFs are expected to get a wave this month. However, the verdict from the SEC is still pending. Millions of crypto traders await the announcement, hoping for a positive result. If you are one of them, then let’s check the possibility of the result through this article.
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Breaking Down Bitcoin Futures ETF
Bitcoin is regarded as a commodity and is also the underlying asset in Bitcoin’s future contracts. The Bitcoins sold for cash are said to be traded in the spot market. These spot markets are not regulated by the CFTC or SEC. Further, the Bitcoin Futures ETFs can be broken down into three parts, as mentioned below.
1. Bitcoin futures contracts
The Bitcoin futures contracts are time-limited, standardized contracts that convey the right time to purchase or sell the underlying asset at some point in the future. These contracts do not convey the ownership of the asset.
2. ETFs
ETFs or Exchange Traded Funds are investment companies which are regulated by the SEC. Just like mutual funds, ETFs have their investment objectives and take the help of professional money managers to meet those objectives on time. In the case of managed commodity futures funds, the investment companies tend to set up subsidiaries that serve as commodity pools.
3. Commodity pool
A commodity pool is an investing trust or entity that trades commodity futures contracts for the investor’s benefit. Here, the CFTC monitors trading advisors (the ones who make trading decisions) and commodity pool operators (the ones who run the pools).
Bitcoin ETF Approval Deadline Date! Plans To Make Before Investing
As the Bitcoin prices rose up to 160% last year in 2023, the Bitcoin ETFs might get a wave of approval. As per the statement of an asset management firm, Blackrock, they expect a green signal for the Bitcoin ETF proposal this week. However, if this happens, the firm is all set to reveal its earnings report. The anticipation of the proposal to be agreed is peaking amongst the investors these days. January 10, 2024, is the expected date for the Securities and Exchange Commission to announce its decision.
Over the past week, the efforts between the Commission and the key issuers have been intensified to boost optimistic results for the long-anticipated approval of the U S Bitcoin ETF. Bitcoin ETF analysts Eric Bachan and James Seyffart say that the odds of approval on January 10, 2024, is up to 95% while focusing on the fact that rejecting the 14 issuers was very unlikely. However, if the result turns out to be positive, the asset managers shall file their S-1 documents with the SEC to launch their shares on the US stock exchanges.
Being regulated doesn’t mean that it is risk-free. Before investing, you must make a proper plan, know all the markets- spots, and futures, and know the risks of your investments.
Final Words
With this, we conclude that Blackrock expects a positive nod on the Bitcoin ETF proposal, while the analysts are doubtful. The decision declaration is expected to come out on January 10, 2024. If the proposal result is positive, asset managers can launch their shares in the US stock market.
