Inquiry about Bitcoin ETF and institutional investors

CryptoBry

sr. member

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Quote from: Yeahpro on November 10, 2018, 05:42:48 AM

My question is: Why would investors wait to buy bitcoin indirectly, when they can buy now? And is the grounds of possible manipulations on which the proposals have been rejected a solid argument? And lastly would bitcoin ETF approval herald the bull run as most people believe?

In the past many months before the hypes of ETF died down, there were so many hypes on how the said platform can be the way for institutional money to be pouring in to Bitcoin in an indirect way. Because it is assumed that institutional money is basically afraid to be joining the Bitcoin bandwagon due to security concerns, ETF is the panacea that can cure this problem. Until the market generally lost interest with ETF seeing the many rejections which proponents suffered in the hand of SEC. There are some who are voicing out that an ETF will and can be the tool to control the growth of Bitcoin maybe in the name of reigning in to its volatility, in a similar way to that of gold. Of course, these can be just like any other speculation because it can be hard to determine something that is not yet operational. Can ETF then be the real catalyst to push Bitcoin to that big bull run? Personally I am wishing it can be though I am really doubting it a lot judging on what we are seeing with the results of ICE's Bakkt.

Kyraishi

hero member

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Quote from: DennyPen on November 14, 2018, 03:55:22 AM

I belive, ETF is the best PR tool that will be used for the masses when needed. Smart money always enters the market at its lowest point.

I agree it's more of a PR stunt than anything that's actually going to be useful for a lot of people.

I'm pretty sure ETF's or exchange-traded funds are still regulated and traded on difference exchanges, per whatever region, while it is impossible to regulate OTC transactions due to how it's structured and how easy they are to perform.

I still don't really understand what ETFs are going to provide to the institutional investors of our world, can someone please explain here?

DarkDays

legendary

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Merit: 1189

ETFs are regulated, most other ways of purchasing Bitcoin are not.

Regulation usually implies safe, insured and legal. These platforms would be far more secure and liable than any non-regulated platform, making them ideal for institutional investors.

When you are dealing with potentially tens to hundreds of millions of dollars of other people's money, safety comes before profits.

bitmover

legendary

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bitcoindata.science

Quote from: Yeahpro on November 10, 2018, 05:42:48 AM

My question is;
Why would investors wait to buy bitcoin indirectly, when they can buy now?

I know this is an old topic, however I was recommended to read topic, so I answer this question

There are many institutional investors which cannot buy bitcoin directly, due to regulations and law.

For example, pension funds cannot buy bitcoin, the law clearly state what they can or cannot buy, after all they are investing someone else's money. There are other institutional investors in the same situation.
They can not buy a bitcoin, but they can buy a future, or an ETF.

Theb

hero member

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Just like how big investors in other markets, they want their money to be managed (invested) by their relationship managers as they are the ones who knows the market well which would be less risky for them if they did. Some of these institutional investors won't really be risking their money on a decentralized exchanges as they have more to lose than to gain, if their capital is not on a whale level they won't really influence the price movements in the market, that is why piling their capital with an ETF because it is really the safest way to go for them to enter the crypto market.

davis196

hero member

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Quote from: Yeahpro on November 10, 2018, 05:42:48 AM

Bitcoin ETF, as I understand is a way of indirectly buying bitcoin without needing to go through all the processes associated with purchase (exchanges, wallets, private keys etc)
It's basically a share of bitcoin which can be tradeable in external exchanges and would be classified as a security and would mirror the value of actual bitcoin.

It has been presented as a door to bring institutional investors into bitcoin and increase the adoption and price.

But I've come across articles where institutional investors are said to be buying bitcoin through OTC trades.

My question is;
Why would investors wait to buy bitcoin indirectly, when they can buy now?

And is the grounds of possible manipulations on which the proposals has been rejected a solid argument?

And lastly would bitcoin ETF approval herald the bull run as most people believe?

The investors don't want to buy btc right now,because there is a constant fear of a mass bitcoin/crypto ban in the USA,that will crash the prices.An bitcoin ETF approval by SEC,would mean that trading bitcoin is more secure from a regulatory point of view and the threat of a US bitcoin ban will be close to zero.

dothebeats

legendary

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Most of these so-called "institutional investors" wanting to partake in an ETF simply don't want to lose money. In a completely regulated environment and investment, they have less room to fail and be gamed on, whereas in directly participating in the bitcoin market, unexpected movements happen every so often which makes it a lot riskier compared to ETFs. As anyone who are completely versed in their own game and have more chances of winning, why would they deviate from their custom just to make a little more money but risk a lot in the process?

Quote from: Yeahpro on November 10, 2018, 05:42:48 AM

And is the grounds of possible manipulations on which the proposals has been rejected a solid argument?

And lastly would bitcoin ETF approval herald the bull run as most people believe?

I don't really dig up much on the verdicts of rejected ETFs but there are some news that I've read in which the SEC have declined some ETFs since they can still be avenues for manipulation. thus potentially promoting fraud and money laundering in the process. As for ETF approvals being the main catalyst of the next bull run, that will be highly improbable as the interest on them have already faded.

Red-Apple

hero member

Activity: 1470

Merit: 655

i can not see why any of the institutional investors would require something like ETF to invest in bitcoin. there is no limitation when it comes to invest in in bitcoin and because of that if they wanted to then they would have already invested in bitcoin.
i think part of this saying that institutional investors would come when ETF is approved is be cause people hope for a rise desperately!!!

FallenBtcAngel

newbie

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The ETF will be approved when SEC makes sure they have enough interest in starting the next bull run. But that's not bad at all for an average btc user.

Harrisonimo

full member

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The ETF release has been what the cryptocurrency world have been waiting for all this while; with the believe that it will surely set the bullrun open! The major reason why the SEC have opposed the ETF's release is because they have seen and termed it as a market manipulation! Most Investors are finding a real soft landing option of coming into the cryptocurrency market and with minimum risk threats on their investments.

aad140386

member

Activity: 420

Merit: 20

simply getting the job done

It is possible that Bitcoin ETFs will be bought by stock speculators who find it advantageous to make numerous trade requests and do not want to make direct bitcoin operations. In addition, it is quite possible that when making speculative transactions, the commission for the transaction will be much lower than with the direct purchase of Bitcoin. I am not a professional in this field, these are just my assumptions. In any case, the adoption of a Bitcoin ETF will have a positive effect on the entire crypto-market.

DennyPen

newbie

Activity: 84

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I belive, ETF is the best PR tool that will be used for the masses when needed. Smart money always enters the market at its lowest point.

Yeahpro

member

Activity: 72

Merit: 12

Bitcoin ETF, as I understand is a way of indirectly buying bitcoin without needing to go through all the processes associated with purchase (exchanges, wallets, private keys etc)
It's basically a share of bitcoin which can be tradeable in external exchanges and would be classified as a security and would mirror the value of actual bitcoin.

It has been presented as a door to bring institutional investors into bitcoin and increase the adoption and price.

But I've come across articles where institutional investors are said to be buying bitcoin through OTC trades.

My question is;
Why would investors wait to buy bitcoin indirectly, when they can buy now?

And is the grounds of possible manipulations on which the proposals has been rejected a solid argument?

And lastly would bitcoin ETF approval herald the bull run as most people believe?

Topic: Inquiry about Bitcoin ETF and institutional investors (Read 277 times)