There is Sufficient Liquidity for Bitcoin ETFs
Market experts believe that sufficient liquidity is available for approval of Bitcoin ETFs
Bitcoin stock exchange investment funds (ETFs) have been struggling to get their place in the market for many years and get approval from the American Securities and Exchange Commission (SEC). Fund providers also argue that Bitcoin ETFs can be launched in 2019, because there is sufficient market liquidity.
ETFs are becoming an integral part of the investment market. The research firm ETFGI estimates that the market value of ETFs and ETPs listed in Europe in 2020 will reach $ 1.1 trillion. Morgan Stanley estimates that global ETF assets will reach $ 9 trillion by 2022. Therefore, as interest in these assets increases, regulators are working hard on structural vulnerabilities.
On the other hand, a study by brokers and asset manager Charles Schwab shows that the millennium generation has increasingly preferred ETFs for investment. In this case, the rules of the game may change if the SEC approves a Bitcoin ETF. However, there are a few factors to consider before allowing an ETF to be traded in one of America’s largest stock exchanges.
… The market value of Bitcoin is $ 72 billion ““
Last year Blockforce Capital launched a Blockchain ETF with BLCN and the world’s first China Blockchain ETF BCNA. According to Eric Ervin, CEO of Blockforce Capital, the current market conditions can support Bitcoin ETFs for two reasons. Ervin stated that Bitcoin’s market value reached $ 72 billion as the first of these reasons and continued as follows:
There is a number of ETFs currently focusing on market-specific assets, although this is a small amount compared to many blue-chip stocks. For example, iShares’ IWC ETF focuses on micro-stocks and has about $ 900 million in assets. Collectively, stocks have a market value of about $ 450 billion. This figure may be overshadowing Bitoin’s market value. However, when we look at the liquidity of core assets, we see significant volume restrictions.
A growing market: stock market arbitrage
As the market develops, participants are becoming more sophisticated and stock market arbitrage is increasing. Ervin said, gün Stock market arbitrage (bitcoin from the A stock market and the small profit and B stock market) to become a market day by the introduction of traditional market players has become a growing market. Because the returns provided by arbitrage are generally considered as ‘risk free’ .
With them, the Blockforce Capital team achieved an average of 75 bps per transaction when the arbitration began in early summer 2018. Ervin says the following:
This figure is reduced. Due to increased competition, the number of opportunities has also decreased. However, these market participants provide liquidity to the market. Because, in any stock exchange, if the price of the Bitcoin deviates from the average average, the participants draw the average price by arbitrage.
In addition to these market descriptions, could the crypto money market be waiting for the SEC’s decision to catch the momentum? Can the change in Bitcoin’s long-term decline if the SEC does not postpone it again on February 27th?