Should You Buy The Spot ETFs

                           Introduction. 

It came as no surprise that the ETFs will be approved.  And it was finally approved, we were all glad. But the caveat is should you buy the ETFs or not as a crypto trader or investor or both.  let’s find out if you SHOULD YOU BUY THE SPOT ETFs.

Approved Bitcoin spot ETFs: what it really means for Bitcoin traders

The U.S SEC(Securities and Exchange Commission) approved the first ever Bitcoin spot ETFs on January 10th. All the 11 applicants were approved and started trading some hours after. In the wake of this event, BTC went as high as $48,969 according to CMC.  But it quickly started its decline. BTC kept dropping from this new year high and lost $7k of its market price. Majority of the cause being Grayscale.

Grayscale, a crypto based world largest asset manager may have a lot to do with the bitcoin price drop.  Initially Grayscale offered  Bitcoin trust to customers. After the approval of the Bitcoin spot ETFs, Grayscale traders pulled out $579M out of the Grayscale Bitcoin Trust(GBTC). And transferred another $376M in BTC as price stabilizes at $42k .  To meet the demand to sell GBTC, Grayscale sold off 11,000 BTC. As of now the GBTC fund has been converted to an ETF. Greyscale applied for the spot ETF and was approved. Traders of the GBTC started selling when they could not redeem the trust for cash shortly before the GBTC fund was converted to an ETF. 

How Are Bitcoin Traders Affected By Live Spot ETFs

    Bitcoin traders like myself and you reading right now are probably wondering whether to buy these ETF hypes.  Well your suspicion proves you right. I don’t think we should buy the spot ETF for the sake of storing bitcoin. It’s better to have full control over your bitcoins. Here is a direct link to get a ledger account and purchase you hardware wallet.. Be in full control of your portfolio today. 

 Below are some of the impacts of the ETFs on pre-existing Bitcoin traders:

1. Price action

The ETFs issuers are now holding large units of BTC. This means their decisions now affect the price of bitcoin from time to time . Bitcoin being the largest cryptocurrency by market cap also has a huge impact on the price of altcoins. We are indeed entering into volatile times. 

2. Portfolio size

With the 11 approved ETF applicants expect the supply of BTC to reduce faster in circulation. These ETF issuers will be buying and hoarding BTC as an asset class for long time store value. The very action that can lead to a supply crunch. In a matter of time Btc will be very scarce and that will make it expensive to buy in future. So don’t sell your bags. 

3. Price correlation 

Bitcoin price may vary from one exchange to the other. And now one ETF to the other. 

Traders trading the ETF will likely trade  with the ETF that can track closely with the native price of Bitcoin. In a worst case we can have divergences triggered when prices don’t correlate. 

Conclusion

The advent of the ETF is still very much new so it’s too soon to determine the extremity of future outcomes. But the above are the most important to be aware of in the interim. Do you think you SHOULD YOU BUY THE SPOT ETFs.

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 Catch you on the next one guys.