<\/p>\n
Hope springs eternal. Or at least a few years. Maybe a decade or two?<\/p>\n
It\u2019s been a decade since the first ever spot bitcoin ETF application. After yet another series of spot bitcoin ETF decision delays by the US Securities and Exchange Commission, the question persists: where should a crypto-focused investor allocate funds in the event that an ETF does \u2014 some glorious day \u2014 actually earn approval?<\/p>\n
In lieu of an SEC-blessed spot bitcoin ETF, the industry offers numerous avenues for crypto exposure right now: mining companies, venture funds, traditional stocks in companies like Coinbase and MicroStrategy, Grayscale Bitcoin Trust shares (GBTC), and of course, actual \u201cphysical\u201d crypto held in storage \u2014 hopefully, cold.\u00a0<\/p>\n
Read more:<\/strong> Delays mount: SEC defers ruling on BlackRock, Fidelity bitcoin ETFs<\/a><\/p>\n So would the approval of a vaunted ETF really change the space all that much? Or is it nothing more than crypto\u2019s MacGuffin, artificially pushing the plot forward with bitcoin\u2019s orange glow emanating from a regulatory briefcase?<\/p>\n For institutions with billions of dollars to move around, things would definitely change for the better, says Jason Yanowitz on the Empire podcast (Spotify<\/a>\/Apple<\/a>). \u201cLet\u2019s say you\u2019re trying to deploy $2 billion into bitcoin,\u201d he says, \u201cit\u2019s very tough to do that.\u201d<\/p>\n \u201cYou have to get a crypto native OTC desk<\/a> and implement it like that. The ETF is going to bring enhanced liquidity. It\u2019s going to reduce the need for physical holdings,\u201d he says.<\/p>\n In the same way that people don\u2019t want to physically hold gold, slipping precious metal bars under their beds, people don\u2019t want the responsibility of holding their own bitcoin, Yanowitz says. \u201cThey don\u2019t want to deal with that.\u201d\u00a0<\/p>\n On top of the secure custody advantages, an ETF offers increased price transparency and discovery, \u201cwhich institutions want,\u201d he says.<\/p>\n For individual investors, an ETF provides a wider array of investment strategies. However, this might come at the cost of forgoing certain offerings that have previously acted as proxies.<\/p>\n \u201cHistorically,\u201d long-time crypto investor Santiago R. Santos says, \u201cinvestors have allocated to the industry by investing in venture funds, hedge funds and Grayscale products.\u201d\u00a0<\/p>\n Santos says a spot bitcoin ETF will likely have a negative impact on large scale funds and entities like Grayscale, if it fails to convert to an ETF<\/a>. With Grayscale\u2019s current GBTC trust, \u201cthe fees are very, very high,\u201d Santos says. \u201cIt\u2019s charging a one percent fee or so, whereas an ETF charges basis points,\u201d which are \u201can order of magnitude less.\u201d<\/p>\n \u201cCrypto natives historically have allocated to Grayscale products through a tax advantage account, like a Roth IRA,\u201d Santos says. With an ETF, he says, \u201cthat also becomes a possibility, which is fairly advantageous.\u201d<\/p>\n An ETF offers investors enhanced access and exposure to bitcoin. It introduces a number of strategies with options markets, and facilitates the ability to borrow \u201cin a cost-efficient manner,\u201d he says.<\/p>\n Santos then asks Yanowitz, \u201cif you had a hundred dollars to invest from scratch,\u201d with all the options available today and ETFs to boot, \u201chow would you allocate that hundred dollars?\u201d<\/p>\n \u201cI\u2019m buying bitcoin and Coinbase<\/a>, probably. Those are my two,\u201d he replies, choosing to invest in something he can buy and \u201cforget about\u201d for ten years. \u201cWhy buy the ETF when you could buy the underlying [asset]?\u201d he asks.<\/p>\n Santos answers the rhetorical question, reminding Yanowitz that an ETF offers Roth IRA possibilities, which is impossible with physical bitcoin. But such a strategy might require an investor to \u201cmax out their allocation\u201d to achieve similar results, Yanowitz replies.<\/p>\n \u201cThe most dangerous thing in crypto from an allocating perspective,\u201d Yanowitz says, \u201cis thinking that this time will be different. And if you look at all the last cycles, bitcoin leads.\u201d<\/p>\n \u201cBitcoin leads, that capital flows into ETH<\/a>, that excess capital in ETH flows into \u2014\u00a0 in 2017 it was ICOs, in 2020 it was DeFi<\/a>, in 2021 it was NFTs<\/a> \u2014 that keeps pushing out on the risk spectrum until the cycle is over.\u201d<\/p>\n With a potential spot bitcoin ETF next year alongside the halving<\/a>, a presidential election and continued pressures to \u201cturn the money printer back on<\/a>,\u201d Yanowitz concludes, it\u2019s \u201ctough to be bearish Bitcoin right now.\u201d\u00a0<\/p>\n Despite the years of delays, the crypto faithful remain hopeful \u2014 and the convoluted plot continues.<\/p>\n Get the day\u2019s top crypto news and insights delivered to your email every evening.\u00a0Subscribe to Blockworks\u2019 free newsletter<\/a>\u00a0now.<\/strong><\/p>\n Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can\u2019t-miss tweets and more from\u00a0Blockworks Research\u2019s Daily Debrief<\/a>.<\/strong><\/p>\n Can\u2019t wait? Get our news the fastest way possible.\u00a0Join us on Telegram<\/a>\u00a0and follow us on\u00a0Google News<\/a>.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Hope springs eternal. Or at least a few years. Maybe a decade or two? It\u2019s been a decade since the first ever spot bitcoin ETF application. After yet another series of spot bitcoin ETF decision delays by the US Securities and Exchange Commission, the question persists: where should a crypto-focused investor allocate funds in the […]<\/p>\n","protected":false},"author":2,"featured_media":149630,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-149629","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/149629","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=149629"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/149629\/revisions"}],"predecessor-version":[{"id":149636,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/149629\/revisions\/149636"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/149630"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=149629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=149629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=149629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}This time isn\u2019t different<\/h2>\n
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