ETFs?!

Written By Sushen

What is Scratching the Surface with Soosh? Its a new mini project of mine to provide some context to the world of crypto, finance etc in bite sized written format. As the name suggests, everything here is at surface level (i.e. no deep dives or extremely details/heavy datasets), just enough to get your curiosity to tingle~ so you can learn!

Today's topic: Bitcoin & Ether ETFs

2024 has be a rollercoaster of a year already with Crypto and all things adjacent to crypto. Here are some things that have happened and my attempt to help you understand the 'so what'.

tldr;

  • Bitcoin ETFs are live

  • Ether ETF (also referenced as Ethereum ETF) were approved a few days after the fear of a full blown rejection.

BITCOIN ETFs

Source: https://www.theblock.co/data/crypto-markets/bitcoin-etf/spot-bitcoin-etf-onchain-holdings

Bitcoin Spot ETFs are available across most large funds. This means you as an investor (corporate, self managed fund, retirement account etc.) can get exposure to Bitcoin without owning Bitcoin or having to go through 12+ steps of creating a Central Crypto-Exchange account + KYC process.

You might be thinking, this isn't impressive? Well nearly $300B USD has been trading (see chart below). This allows you to allocate 1-5% (or more, but typically this range for high risk exposure investments, NFA, and DYOR plz) of your total investments into BTC ETFs.

Learn more about ETFs here - https://www.investopedia.com/spot-bitcoin-etfs-8358373

Ether ETFs

The SEC in the US changed its view and ruling on Ether (ethereum) ETF last week. This would allow large funds to provide an Ether ETF offering, similar to the BTC ETF offering. Through this newly approved ETF, individuals and businesses can now capture exposure to two of the largest cryptocurrencies; BTC and ETH, all within their traditional investment accounts.

The anticipated go live date on the ETH ETFs are set to be within 2024 from various funds which would result in nearly +$100B growth of inflows in the next two years!

So why does this even matter?

Historically (and sadly even presently) media and markets have created fear around the entire cryptocurrency industry where all narratives have been negative and an 'against' stance. With the ETFs being approved, it provides:

  • a vote of confidence from the SEC that they are (slightly more) accepting to Bitcoin and Ether, for the time being and allow alternative ways for investors to get exposure to both without outright purchasing the crypto

  • a vote of confidence from the largest funds that manage $45T+ in aggregate as they now offer a crypto product that not only crypto-native users but also all active investors have access to

  • a (small) step towards clarity as to what exactly will Bitcoin & Ether will be classifed as (the decade old debate of security vs currency vs commodity vs digital asset vs something new?)

  • a step closer to having US seeing crypto as a partnering technology to the government + economy, similar to other pro-crypto countries

  • a new pressure of supply and price as funds are required to physically own the BTC and ETH that are reflective of the inflows/outflows. That means new increased demand for both cryptocurrencies!

Until next time on the next scratching the surface with soosh!

*this article is for curiosity only and nothing stated within should be taken as tax and financial advice. DYOR!

Legend:

DYOR - Do Your Own Research

NFA - Not Financial Advice

KYC - Know Your Customer

Sushen
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