Investors around the world are closely monitoring the status of a potential bitcoin exchange-traded fund (ETF) in the United States, eagerly awaiting regulatory approval.
As of now, there are only 8 countries worldwide accepting spot distribution of Bitcoin ETFs out of nearly 200 countries and sovereign territories worldwide. Today, let's learn about this interesting topic with vuongchihung.com through this article.
What is a Bitcoin ETF?
Bitcoin spot ETF refers to the immediate or current price of the underlying asset, in this case bitcoin itself. These ETFs essentially hold actual bitcoins, aiming to closely track the cryptocurrency's real-time market price. Notably, prominent examples such as the 21Shares Bitcoin Core ETP (CBTC) have emerged, providing investors with regulated options for direct exposure to the dynamic digital currency landscape.
While the convenience of a spot Bitcoin ETF is obvious, it is important to note that investors are not exempt from the associated costs. Management fees and brokerage commissions are still part of the investment landscape; However, these costs are balanced by the efficiency gains of bypassing the time and exchange fees involved in buying and holding bitcoin directly.
How does the Bitcoin Spot ETF work?
The operating framework of the Bitcoin Spot ETF involves a meticulous process to ensure security and efficiency. These ETFs hold Bitcoin securely in a digital vault, managed by registered custodians. To start the process, the ETF purchases Bitcoin directly from other holders or through authorized cryptocurrency exchanges. Using advanced security measures, such as cold or offline storage, minimizes risks such as hacking, providing an extra layer of protection for stored tokens.
After redeeming Bitcoin, the ETF issues shares equivalent to the amount of Bitcoin held. Share prices are designed to closely reflect the current market price of the cryptocurrency. Integrated into the functionality of the Bitcoin spot ETF are authorized participants (APs), which are typically large financial institutions. AP participates in the creation and redemption of ETF shares based on market demand. If ETF shares deviate from the actual Bitcoin price, AP will intervene, creating or buying back shares in large blocks to cover the difference.
The Bitcoin Spot ETF has not yet been widely approved
Investors are presented with two distinct types of Bitcoin ETFs: futures-based and spot-based. Each carries its own set of characteristics and meanings, contributing to the ongoing conversation about mainstream Bitcoin adoption in traditional financial systems. Bitcoin futures ETFs, popular in the current landscape, derive their value from futures contracts tied to the price of BTC. Spot Bitcoin ETFs, on the other hand, closely mirror the actual market price of BTC, with institutions securely purchasing and storing the cryptocurrency.
While futures-based Bitcoin ETFs currently dominate in terms of regulatory approvals, attention is increasingly turning to spot Bitcoin ETFs. The importance of a spot ETF lies in the potential benefits it brings to Bitcoin investments: greater accessibility, convenience, and a safe, regulated environment. Introducing regulatory measures could not only enhance these advantages but also bring increased exposure, capital and user traffic, strengthening Bitcoin's credibility as a viable asset class.
Bitcoin Spot ETF in the United States
In the United States, recent actions by asset managers applying to list spot Bitcoin ETFs indicate growing confidence in the possibility of approval by the Securities and Exchange Commission (SEC). The anticipation of these ETFs entering the market indicates a positive change in regulatory sentiment.
However, despite the industry's optimism, uncertainty persists until the SEC makes an official announcement. The potential approval of a spot Bitcoin ETF in the US could open new avenues for investors, providing a regulated and accessible entry point into the dynamic world of cryptocurrency. However, in case of any unexpected resistance from the SEC, investors can explore offshore options as a viable alternative.
The SEC recently announced a delay in approving the spot BitcoinETF, a decision affecting dozens of applications submitted by financial heavyweights including BlackRock, WisdomTree, Fidelity, VanEck and Invesco. This delay, while frustrating for eager investors, underscores the cautious approach of regulators in navigating the evolving landscape of digital asset investments.
Although there are up to 10 Bitcoin spot ETF applications awaiting approval, SEC concerns about market manipulation remain a significant obstacle. The debate heats up as focus turns to a potential US Bitcoin ETF spot market. According to experts, demand on the first day could skyrocket, with estimates starting at $1 billion or more. There is a lot of speculation regarding the SEC's decision on pending Bitcoin ETF spot applications.
Bitcoin ETF Approved in the following countries
Currently, total assets held in spot Bitcoin ETFs have increased beyond an impressive $4.1 billion, showing significant confidence and interest from investors in this emerging sector. The approval of these ETFs by regulators not only acknowledges the maturity of the cryptocurrency market but also provides investors with a safe and regulated means to engage with Bitcoin.
Canada
Amid the rapidly growing landscape of Bitcoin investments, Canada has emerged as a pioneer, cementing its position as a global leader in the Bitcoin ETF sector. The North American territory took a significant step forward when it approved the world's first spot Bitcoin ETF, Purpose Bitcoin ETF, in February 2021.
Canada's prominence in the cryptocurrency market is highlighted by its representation of approximately 40% of all investment products and almost 50% of total assets exceeding $2 billion. Pioneering this financial frontier is the Purpose Bitcoin ETF (BTCC), brought to investors by Purpose Investments and traded on the Toronto Stock Exchange (TSX). Since launching in February 2021, the fund has amassed more than $819 million in assets, securing its position as the preeminent spot Bitcoin ETF today.
Bitcoin ETF spots available
In addition to the Bitcoin ETF, Canada hosts a series of spot BTC ETFs to enrich the investment landscape:
CI Galaxy Bitcoin ETF (BTCX.B): Launched by CI Global Asset Management in March 2021, the fund boasts total assets of more than $569 million, making a significant contribution to the Canadian Bitcoin ETF portfolio.
Bitcoin Fund (QBTC): Managed by 3iQ Digital Asset Management and launched in April 2020, this ETF has accumulated total assets of more than $235 million, demonstrating sustained investor interest.
3iQ Bitcoin ETF (BTCQ): Another offering from 3iQ Digital Asset Management, this ETF entered the market in December 2020, raising total assets of more than $128 million.
Evolve Bitcoin ETF (EBIT): Launched by Evolve in February 2021, the fund has quickly gained traction, boasting total assets of more than $126 million and further diversifying its Bitcoin ETF offerings of Canada.
Fidelity Advantage Bitcoin ETF (FBTC): Introduced by Fidelity in November 2021, this ETF quickly amassed $98 million in total assets, signaling institutional interest in the Canadian cryptocurrency market .
BetaPro Inverse Bitcoin ETF (BITI): Adding a unique dimension to the ETF landscape, BITI, launched in April 2021, has amassed more than $24.5 million in total assets, providing investors alternative strategies.
Brazil
Brazil has seen strong interest in spot Bitcoin ETFs, which have been actively traded in the country for over two years. As of November 21, collective assets under management (AUM) for these ETFs had increased to an impressive $96.8 million. Leading the way is Hashdex FDI's Bitcoin Nasdaq reference price (BITH11), which boasts a significant $57.8 million in AUM, representing a significant market share of around 60%.
Bitcoin ETF spots available
Hashdex FDI Bitcoin Reference Price (BITH11) has played a pivotal role in driving Brazil's foray into a Bitcoin ETF. With a market presence of more than two years, the fund has attracted investor confidence and consolidated its position as a pioneer in the Brazilian cryptocurrency investment scene.
The second entrant in the Brazilian Bitcoin ETF scene is QBTC11, which marks a historic milestone as the first Bitcoin ETF in Latin America. Launched in June 2021 by Brazilian asset management company QR Asset Management, QBTC11 has quickly accumulated more than $35 million in total assets. This ETF is actively traded on the B3 exchange, further expanding access to Bitcoin investments for Brazilian investors.
Virtue
ETC Group Physical Bitcoin (BTCE) has become the country's exclusive Bitcoin ETF in Germany. Launched in June 2020, this pioneering fund offers investors 100% exposure to BTC, marking a significant development in the burgeoning crypto investment sector.
ETC Group, acting as the issuer, has played a key role in guiding BTCE to its current prominence. The fund's regulatory compliance makes it the only regulated Bitcoin ETF in Germany, underscoring its commitment to transparency and compliance with financial regulations.
Bitcoin ETF spots available
BTCE, currently the second largest Bitcoin ETF globally, boasts an impressive total asset value in excess of $802 million. The fund's notable position reflects growing investor interest in Bitcoin and the broader cryptocurrency market. Its success is attributed to strategic positioning, regulatory compliance and a robust framework for safety oversight. BitGo Trust Company, serves as the custodian of BTCE, further enhancing the security and reliability of the fund.
Australia
Australia has taken a significant leap into the world of cryptocurrency investing with the introduction of the Global X 21Shares Bitcoin ETF (EBTC), the country's only Bitcoin spot ETF. Launched in May 2022 by New York-based ETF provider Global X Management, this innovative fund has quickly attracted the attention of investors seeking exposure to the world of technical assets dynamic number.
Despite being new to the Australian market, the EBTC ETF has quickly amassed an impressive total asset value in excess of $12 million. This significant growth reflects the growing appetite for cryptocurrency investments and the trust placed in Global X Management's expertise in managing exchange-traded funds.
Bitcoin ETF spots available
The EBTC ETF operates with a unique approach, using cryptocurrency exchange Coinbase as its custodian. This strategic partnership adds an additional layer of credibility and security, assuring investors of the fund's commitment to protecting their digital assets in the volatile cryptocurrency market . Traded on Cboe, a popular global exchange platform, the EBTC ETF offers Australian investors a convenient and regulated route to engage in Bitcoin trading. The fund's presence on a reputable exchange not only enhances accessibility but also emphasizes compliance with industry standards and regulatory requirements.
Liechtenstein
Liechtenstein, a principality known for its progressive approach to finance, has emerged as a notable player in the global market for spot Bitcoin ETFs. Against this backdrop, the VanEck Bitcoin ETN, introduced in November 2020, has positioned itself as an important investment product for those seeking exposure to the dynamic world of digital assets.
Bitcoin ETF spots available
Powered by VanEck, a trusted name in the financial industry, the VanEck Bitcoin ETN stands out as a special exchange-traded note (ETN) that is traded as an ETF on various exchanges. This hybrid structure offers investors a unique avenue to get involved in Bitcoin, combining the advantages of both notes and exchange-traded funds.
According to the latest available data, the VanEck Bitcoin ETN has become one of the largest spot BTC investment products globally, boasting total assets exceeding an impressive $218 million. This significant figure underscores the widespread investor interest in the fund and highlights its importance in the growing landscape of digital asset investments.
Jersey, Guernsey and the Cayman Islands
The European market for spot Bitcoin ETFs has seen a notable concentration in territories considered tax havens, with 9 out of 10 notable funds establishing their presence in these zones. such legal area. Of these, the British Crown Dependencies of Jersey and Guernsey, located in the heart of the Channel Islands, emerged as the major players, together hosting seven Bitcoin spot ETFs.
Expanding beyond the Channel Islands, the Cayman Islands, a self-governing British territory in the Caribbean known for its tax-friendly environment, has joined the list. Valor Bitcoin Zero, headquartered in the Cayman Islands, is actively traded on European exchanges such as Euronext in Amsterdam and Paris Börse Frankfurt.
