What is a Bitcoin ETF and why is everybody waiting for it?

Do all crypto enthusiasts remember that BTC plummeted after SEC announcement that Bitcoin ETF launch would be delayed? The media space was abundant with information and opinion that ETF approval would...

Do all crypto enthusiasts remember that BTC plummeted after SEC announcement that Bitcoin ETF launch would be delayed?

The media space was abundant with information and opinion that ETF approval would be a kind of silver bullet for the falling crypto market. Many authors compared an ETF entry with the impact futures launch had on Bitcoin in late 2017.

Instead of reading the pseudo-experts’ rhetoric, Hitecher proposes to look carefully at what Bitcoin ETF is about and the impact it will have on the entire crypto Market.

What is an ETF?

This abbreviation stands for an Exchange Traded Fund, some traders also use the Exchange Investment Fund term which is the same but sounds more impressive.

In fact an ETF is a securities equivalent of things traded at an exchange (most often they are stocks and shares or raw materials).

In the Wikipedia and the Internet, you can find complex definitions full of exchange terms, but all of them boil down to that ETF is a paper evidencing the obligation of the exchange to give you, at your request, a certain amount of something. For example, you want to buy 2 tonnes of gold but you cannot physically take it, so instead of gold you buy an ETF paper that contains a commitment by the ETF that the exchange must give you, at your request, the 2 tonnes in question. If you imagine that an exchange is a store, then ETF is money, which is accepted only at a certain store (or more rarely, a store chain).

Why is the world waiting for a Bitcoin ETF?

Unlike gold, Bitcoin does not exist in physical form and it is no challenge storing it. However, all of us are familiar with sad stories of laymen who fell victim to fraudsters and lost all their investments.

Practical experience shows that the law enforcement agencies are hardly helpful in such cases. So, you can imagine how this prospect scares the Wall Street big players. And this is the reason behind their vested interest in delegating all risks to an exchange that will launch an ETF.