ETF approving in August, how much it will affect the price?

[Pursuer]

...

for bitcoin it is about adoption and less about speculation. for example in cases of Gold ETF, ... after ETF gold adoption didn't increase, people already knew about gold and were using it and investing in it. ETF was something else.

but when it comes to bitcoin people still don't know about bitcoin, many of them are even scared of bitcoin because of countless number of FUDs in the media. something like ETF can change that mentality and remove most of those FUDs which means a lot of people will start seeing bitcoin for what it really is and start buying it => increased adoption = rising price.

[gentlemand]

The thing is that this ETF is backed by Bitcoin, is insured, and pretty much excludes a large part of the retail investors because of the $200k entry point. The latter is a very important factor for the SEC apparently.

I would've thought for them to be fully convinced by that angle it would need to be officially accredited investor only. There are plenty of retail investors with that type of money. They would need to be explicitly excluded. Also a fund could sell stakes in those $200k lumps to little people.

[Lucius]

The thing is that this ETF is backed by Bitcoin, is insured, and pretty much excludes a large part of the retail investors because of the $200k entry point. The latter is a very important factor for the SEC apparently.

I would've thought for them to be fully convinced by that angle it would need to be officially accredited investor only. There are plenty of retail investors with that type of money. They would need to be explicitly excluded. Also a fund could sell stakes in those $200k lumps to little people.

In case the ETF is approved, how much will actually be the investor's interest in this type of investment? We see that futures have not achieved some great success, and although this is something completely different here, whether large investors ready to invest billions in BTC at this moment?

Exchange Traded fund is the much talked in cryptocurrency community and the hope of its approval is the main factor that is making bitcoin price gone bull run  in the past few days. IF bitcoins can get to 25,000 usd by December of this year, then I think it will be the approval of this ETF

Maybe price increase these days have something with ETF, but maybe something else causes that. It is "easy" for BTC go up to 25k $ if there is fuel for that rocket, last year it takes only 1 month from 7k $ to 20k $.

[gentlemand]

In case the ETF is approved, how much will actually be the investor's interest in this type of investment? We see that futures have not achieved some great success, and although this is something completely different here, whether large investors ready to invest billions in BTC at this moment?

Dunno. Like everything else it's primarily an excuse to pump. I've lost count of the amount of things that were going to 'save' us like Ledgerx, futures etc.

I guess the main difference with this is that it's finally the thing you could slot into someone's existing trading account without them having to shop elsewhere. That's a big deal no matter how you look at it. Not sure what the uptake would be in the first year or two but it's a useful brick in the foundations.

[1Referee]

I just don't think these things fundamentally affect supply and demand. ETF shares and futures contracts are only worth the contract backing them, and in all cases (based on the current regulated offerings), there is no BTC settlement and no real capital flow to the spot market. The only application I've heard of for a product that will be settled in BTC is from the ICE, and I don't know how serious they are about bringing it to market.

Again, it doesn't matter whether or not the upcoming ETF directly affects the spot market, the important factor is that every share is backed by its worth in Bitcoin (coins that will be taken out of circulation). The main point; if you as liquidity provider run out of coins, what do you think will happen? They will either buy stock from exchanges or try to obtain coins elsewhere. Given the fact that there is so much demand for OTC deals, the liquidity providers will have to buy from exchanges in order to fill up their reserve.

Also don't forget that this is just one of the many ETF's that will be fighting for volume. Eventually they will cause the market to dry up if the demand is fierce enough.

[Samarkand]

...
In case the ETF is approved, how much will actually be the investor's interest in this type of investment? We see that futures have not achieved some great success, and although this is something completely different here, whether large investors ready to invest billions in BTC at this moment?
...

I think the price action will play out similarly to the action around the launch of the Bitcoin futures.
Buy the rumor, sell the news should be the best play here.

The price will most likely increase in advance of the launch date and afterwards will come down unless
a new catalyst emerges that would allow a continuation of a substantial price increase. I also think that
an ETF would see less investments than people expect.

[figmentofmyass]

The thing is that this ETF is backed by Bitcoin, is insured, and pretty much excludes a large part of the retail investors because of the $200k entry point. The latter is a very important factor for the SEC apparently.

I would've thought for them to be fully convinced by that angle it would need to be officially accredited investor only.

in the USA, accredited investor = net worth of at least $1M (excluding value of primary residence) or annual income of $200k+. so i guess it is. as i recall, the grayscale application came with the same caveats.

In case the ETF is approved, how much will actually be the investor's interest in this type of investment? We see that futures have not achieved some great success, and although this is something completely different here, whether large investors ready to invest billions in BTC at this moment?

Dunno. Like everything else it's primarily an excuse to pump. I've lost count of the amount of things that were going to 'save' us like Ledgerx, futures etc.

that's the vibe i get it. pump it!

haven't heard a convincing reason why it matters. i've never bought the idea that accredited/institutional investors need to wait for an ETF to invest. there are reputable custody solutions and a robust OTC market already today. when blackrock says that institutions aren't expressing interest for these products, i don't think they're lying. remember, these people are dinosaurs. they're gonna be chasing after the market. why are people waiting for them to pump the market?

I guess the main difference with this is that it's finally the thing you could slot into someone's existing trading account without them having to shop elsewhere. That's a big deal no matter how you look at it.

you can do that with GBTC, ledgerX, XBT Provider (swedish ETN)---all available through standard online brokers. and also regulated futures too.

hype, hype and more hype....

[gabmen]

...
In case the ETF is approved, how much will actually be the investor's interest in this type of investment? We see that futures have not achieved some great success, and although this is something completely different here, whether large investors ready to invest billions in BTC at this moment?
...

I think the price action will play out similarly to the action around the launch of the Bitcoin futures.
Buy the rumor, sell the news should be the best play here.

The price will most likely increase in advance of the launch date and afterwards will come down unless
a new catalyst emerges that would allow a continuation of a substantial price increase. I also think that
an ETF would see less investments than people expect.

I kinda agree with you there that prior to aug 10, btc will start moving a bit sharply upwards though whether it will continue or not would depend on whether etf is approved or not. If approved, confidence would liklely soar and a that's probably when we'll see a legitimate bull run happening. If it doesn't get approved, then good luck lol.

[Lucius]

In case the ETF is approved, how much will actually be the investor's interest in this type of investment? We see that futures have not achieved some great success, and although this is something completely different here, whether large investors ready to invest billions in BTC at this moment?

Dunno. Like everything else it's primarily an excuse to pump. I've lost count of the amount of things that were going to 'save' us like Ledgerx, futures etc.

I guess the main difference with this is that it's finally the thing you could slot into someone's existing trading account without them having to shop elsewhere. That's a big deal no matter how you look at it. Not sure what the uptake would be in the first year or two but it's a useful brick in the foundations.

And we see it right now, price is very close to 8k $ and ETF is making profit for some people, no matter how it will end. However, I agree that it would be good that SEC makes a positive decision, even big investors have opportunities today to buy BTC, some of them maybe just wait something like this.

Again, it doesn't matter whether or not the upcoming ETF directly affects the spot market, the important factor is that every share is backed by its worth in Bitcoin (coins that will be taken out of circulation). The main point; if you as liquidity provider run out of coins, what do you think will happen? They will either buy stock from exchanges or try to obtain coins elsewhere. Given the fact that there is so much demand for OTC deals, the liquidity providers will have to buy from exchanges in order to fill up their reserve.

Also don't forget that this is just one of the many ETF's that will be fighting for volume. Eventually they will cause the market to dry up if the demand is fierce enough.

If investors show great interest for BTC ETF and start buying large quantities from exchanges there is no doubt that price will go far away from the Moon., In such a scenario some speculation regarding price are become pretty realistic, six figures numbers in 3-4 years or maybe even sooner?

Do you have any opinion about how much money should enter the market to dry it up, we are probably talking about trillions $?

[gentlemand]

Do you have any opinion about how much money should enter the market to dry it up, we are probably talking about trillions $?

There would be plenty of coins ready to meet it if figures got silly. I do not believe most people when they say they're sticking to BTC no matter what. Only a small proportion are true believers. The rest believe in a large bank balance but won't admit it to stay looking cool.

Having said that there really aren't that many to grab.

[1Referee]

Do you have any opinion about how much money should enter the market to dry it up, we are probably talking about trillions $?

Technically (globally speaking) there are less than or close to 1 million directly available coins at current levels. If the price gets high enough more people will get motivated to wake up their cold wallet coins and dump them on the market, which happened last year as well. The market drying up will need a couple of years at the minimum because we have to cycle through the pumps and dumps. Every bull run peak is higher than the previous one, and that should motivate old hands to unload their coins.

In the end it's not just about the money, but the use. If LN gets up and running and people will be financially incentivized to run a node, which is the case, then they won't sell their coins but scoop up passive income in Bitcoin due to people using their liquidity and node to hop through. It's the first ever time in the history of Bitcoin that you can earn passive income without any risks and without having a third party control your funds. It's a big deal.

[cellard]

Do you have any opinion about how much money should enter the market to dry it up, we are probably talking about trillions $?

Technically (globally speaking) there are less than or close to 1 million directly available coins at current levels. If the price gets high enough more people will get motivated to wake up their cold wallet coins and dump them on the market, which happened last year as well. The market drying up will need a couple of years at the minimum because we have to cycle through the pumps and dumps. Every bull run peak is higher than the previous one, and that should motivate old hands to unload their coins.

In the end it's not just about the money, but the use. If LN gets up and running and people will be financially incentivized to run a node, which is the case, then they won't sell their coins but scoop up passive income in Bitcoin due to people using their liquidity and node to hop through. It's the first ever time in the history of Bitcoin that you can earn passive income without any risks and without having a third party control your funds. It's a big deal.

There are many indicators which tell you how insanely undervalued Bitcoin is.

My favorites are (beside the fact that indeed there's less than 1 million coins actually available, or at least moving around)

-There are like 35 million millionaires in the world right now, in USD terms. If they all wanted 1 BTC, even if the total supply was available, there wouldn't be enough, since there would only be 21 million, but the actually supply is 16 million, which as we said before, realistically there's like 1 million coins actually "for sale".

-The richest guy in the world is worth more than the entire marketcap of Bitcoin (Bezos)

-The dotcom bubble peaked at near 7 trillion, then Amazon went much higher than that 10 years later. We have never been anywhere near 7 trillion on the entire crypto ecosystem combined

Conclusion: Bitcoin has been, and continues being, insanely underrated.

[kronos123]

Generally the market always anticipates the important decisions of the competent bodies; the stock and bond market for many months while the cryptocurrency of a few weeks.

Personally I do not think the SEC approves the first ETF in the history of Bitcoin this August, because the chart today is not saying this! but everything can change in a few hours / days, and we might witness a sudden boom in prices or a violent fall.

In any case who has no positions in place, I recommend waiting; there can be enormous speculation, from one to the other, in those days and many people can get hurt a lot.

[thecodebear]

...
In case the ETF is approved, how much will actually be the investor's interest in this type of investment? We see that futures have not achieved some great success, and although this is something completely different here, whether large investors ready to invest billions in BTC at this moment?
...

I think the price action will play out similarly to the action around the launch of the Bitcoin futures.
Buy the rumor, sell the news should be the best play here.

The price will most likely increase in advance of the launch date and afterwards will come down unless
a new catalyst emerges that would allow a continuation of a substantial price increase. I also think that
an ETF would see less investments than people expect.

Just want to point out this is ENTIRELY different that the launch of futures.

If ETF is approved we are talking about allowing traditional investors to invest in actual Bitcoin in a way they understand and in a way that is easy for them to comprehend. It opens up a huge new market.

Futures on the otherhand was about allowing Wall St to buy paper bitcoins that had nothing to do with the real thing. They weren't actually investing in Bitcoin, just betting on the price. Plus most of it was so they could short it. So there was no actual direct gain for Bitcoin from the launch of futures, the hype around it (which caused the Nov-Dec mania phase of the bull run last year) was because everyone saw Futures as the first step to getting Wall St in on actually investing in Bitcoin through stuff like ETFs! So if this ETF gets approved that means now we've finally got the real thing. And last time it was just hype around something that people thought would eventually lead to the real thing and that made Bitcoin go from $6k to $20k!

That said, I think the effect will be gradual. If it gets approved I think we'll see a big thousand dollar or so spike on the news and then a slow bull market for a while. This would all be smart money buying in on the hype before the ETF actually comes out and starts directly moving up the price. An ETF launch would not tank the market like what happened from Futures (which was entirely based on hype of what that would eventually lead to) at the tail end of a long bull run. I'm guessing ETF would slowly build up over months and years so outside of some big pops upward in price after approval I think it would just be the catalyst for the start of the next bull market that will probably cover 2019 and 2020. I think it'll be a while until we see that mainstreet FOMO like we saw at the end of last year because those people are still reeling from the crash.

Basically I could see an approved ETF boost Bitcoin over $10k this Fall and be the catalyst for a new long bull run that sometime next year perhaps starts another round of FOMO from the public which in conjunction with ETF and institutional investors getting in more and more I think we could see $100k in the next 2 years.

[figmentofmyass]

...
In case the ETF is approved, how much will actually be the investor's interest in this type of investment? We see that futures have not achieved some great success, and although this is something completely different here, whether large investors ready to invest billions in BTC at this moment?
...

I think the price action will play out similarly to the action around the launch of the Bitcoin futures.
Buy the rumor, sell the news should be the best play here.

The price will most likely increase in advance of the launch date and afterwards will come down unless
a new catalyst emerges that would allow a continuation of a substantial price increase. I also think that
an ETF would see less investments than people expect.

Just want to point out this is ENTIRELY different that the launch of futures.

If ETF is approved we are talking about allowing traditional investors to invest in actual Bitcoin in a way they understand and in a way that is easy for them to comprehend. It opens up a huge new market.

that's just not true. there is already a live bitcoin ETN that has more volume than most ETFs in existence. anyone with an interactive broker account can invest---institutions, retail, whatever! it's how mark cuban invested in BTC, and it's how any large investor who doesn't want to tailor a custody arrangement would probably invest. ledgerX swaps/options have also steadily risen in volume over the year (though still paltry).

the primary reason ETFs exist is for speculative trading---intraday, short selling/margin. mutual funds traditionally got priced once per day, and comex commodity exchange hours are only 10:30am-3pm. this is why ETFs exist. they're not primarily for "traditional long term investors"---they're for speculative trading, especially short term.

Futures on the otherhand was about allowing Wall St to buy paper bitcoins that had nothing to do with the real thing.

ETF shares are literally paper bitcoins.......

so weird how bitcoiners get all paranoid about "paper gold" and then go around acting like ETF shares are actual bitcoins.

[gentlemand]

ETF shares are literally paper bitcoins.......

so weird how bitcoiners get all paranoid about "paper gold" and then go around acting like ETF shares are actual bitcoins.

Completely depends on the individual proposal. This SolidX one is backed by real coins. The KNCminer ETN is voluntarily backed by real ones.

No doubt in future there will be paper ones, presumably based off futures. But for now if people buy into this one then SolidX has to have the bitcoins to match it.

[figmentofmyass]

ETF shares are literally paper bitcoins.......

so weird how bitcoiners get all paranoid about "paper gold" and then go around acting like ETF shares are actual bitcoins.

Completely depends on the individual proposal. This SolidX one is backed by real coins. The KNCminer ETN is voluntarily backed by real ones.

that wasn't to say ETFs are debt notes per se (ETNs are), but that they are paper substitutes for real BTC.

in both cases, you're trading a security/contract that is "backed" and you're trusting counterparties to be honest (i.e. your contracts are backed by actual value and you will be paid when you try to withdraw).

an ETF is different in that there is technically no "credit risk" beyond the issuer playing games with its assets (WEX and the chinese exchanges come to mind). but then you've got custody/insurance risk and closure risk (and in case of disaster, you will not be paid the underlying but liquidated to cash and probably tied up for many months if not years). beyond that, similar risk can also manifest as disparity from the underlying index. here's one example:

ETFs were in focus during the flash crash of 2010, in which bids on dozens of ETFs (and other stocks) fell as low as a penny a share, and again in 2013, when municipal-bond ETFs traded at a discount to their net asset values during the “taper tantrum,” when bond yields jumped.

And then came Aug. 24. The debacle was a test for the labyrinth of new regulations put in place after the 2010 flash crash, and it wasn’t pretty. As the Dow Jones Industrial Average plunged 1,000 points, triggers went off for mandated halts in many stocks held by ETFs, as well as the ETFs themselves. Then, a number of ETFs stunned investors by trading at prices far below their NAV, highlighting concerns that ETFs might not be as easy to move in and out of at “fair” prices when markets are in disarray. 

ETFs can face disastrous liquidity problems during high volatility and especially during downturns. and during these times, "backing" means fuck all, especially when your account is being liquidated.

but the larger point is about delivery. ETFs only ever liquidate to cash, it doesn't matter what's underlying. if anything bad happens, ever, you will get USD cash (at best), and not necessarily in the amount that is equivalent to the underlying value. (and while you're waiting to be paid over years perhaps, maybe another BTC bubble occurs)

when the true BTC liquidity crisis occurs and price is skyrocketing in the millions of USD, you don't want to be exposed to an ETF. you won't necessarily be able to sell anywhere near spot prices and you may get caught in market halts and liquidations while the rest of the BTC market chugs along.

[thecodebear]

ETF shares are literally paper bitcoins.......

so weird how bitcoiners get all paranoid about "paper gold" and then go around acting like ETF shares are actual bitcoins.

except that there are REAL bitcoins backing them up, so they aren't paper bitcoins, they're real bitcoins being held by the institution providing the ETF, not simply just betting on the future price of bitcoin which is what futures are. ETF will take up actual Bitcoin supply, something that futures don't do. And that is how the price goes up.

So yeah its an entirely different animal than futures. Not only is it buying into bitcoin (as opposed to going short which is what most people who had interest in futures wanted them for), but its buying actual real bitcoin which is held by the ETF instead of by the clients. Futures is to sell bets on what the price will be. Nothing to do with actual investing and actual taking up supply.

[Sengoko]

It will be basically another derrivative market. I mean we do not need ETF's to actually buy the promise of a long or short for the price of bitcoin. We need people to actually buy the coins itself, not bet on the outcome. Will this affect the price of bitcoin in a good way? Yes for sure it will have a great affect. Is this good for bitcoin? No it is not, it has the potential to take bitcoin really high but also bring it way down as well.

[thecodebear]

It will be basically another derrivative market. I mean we do not need ETF's to actually buy the promise of a long or short for the price of bitcoin. We need people to actually buy the coins itself, not bet on the outcome. Will this affect the price of bitcoin in a good way? Yes for sure it will have a great affect. Is this good for bitcoin? No it is not, it has the potential to take bitcoin really high but also bring it way down as well.

I believe the ETF being considered is not for some derivative of Bitcoin but to hold actual Bitcoin. The firm would be buying actual Bitcoin to hold for all their ETF clients. It's no different than Coinbase buying for institutional investors, they'll be buying real Bitcoin. By all accounts it seems Bitcoin ETFs would be very popular as most of the investment community doesn't understand or want to deal with the workings of bitcoin but wants access to Bitcoin's gains, and an ETF is exactly how they would do that. Over time it could bring in tens of billions of dollars, which could correspond to tens of thousands in the Bitcoin price. Think of like 20 million people deciding to put 2% of their whole portfolio in Bitcoin. That'd be tens of billions without even getting into the big money investors. An ETF could be the catalyst that starts the next ride up to like $100k over the next year or two.