What is a Bitcoin ETF?

ETF (Exchange Traded Fund) refers to an investment fund such as stocks, bills, bonds that are traded on an exchange, also known as an ETF or Exchange Traded Fund. So What Is a Bitcoin ETF? The Bitcoin ETF likewise tracks the price of Bitcoin. Bitcoin ETFs are mutual funds traded on traditional exchanges such as the NASDAQ and NYSE, rather than cryptocurrency exchanges.

The existence of Bitcoin ETFs can greatly increase the worldwide adoption of cryptocurrencies. It allows participants who prefer traditional markets to approach and trade cryptocurrencies without hesitation.

Many investors are currently looking for an answer to the question of what is Bitcoin EFT. The first Bitcoin ETF was launched in the traditional stock market in Canada. It is called the Purpose Bitcoin ETF and is traded on the Toronto Stock Exchange under the code “BTCC”. Different attempts have been made to issue a Bitcoin ETF in the United States, but each was rejected by the US Securities and Exchange Commission (SEC) last March 2021. The SEC explained the reason for rejecting these attempts as the volatility in Bitcoin price, the fact that Bitcoin is not subject to any regulation and Bitcoin is open to market manipulation.

One of the advantages of Bitcoin ETFs is that they offer the opportunity to spread risk. So, the Bitcoin ETF reduces the risk of cryptocurrencies becoming volatile. Also Bitcoin ETF; Bitcoin, Ethereum, Apple shares, gold, etc. It can accommodate different assets such as, thus offering diversity to its investors.

As a result, Bitcoin ETFs allow investors in traditional markets to buy Bitcoin on the regulated traditional market. Thus, it plays a strong role in the adoption of cryptocurrencies as an asset class.