Original Title: "A BTC ETF is a watershed moment"

Original Author: Cryptojoe

Original Translation: Odaily Planet Daily

Bitcoin ETF is an important milestone as it can quickly meet the (traditional) market's expectations without a long waiting time. Bitcoin ETF will attract interest from various investors, especially institutions such as family offices, private banks, and hedge funds, as it provides a compliant way to gain exposure to spot bitcoin globally. If there is a demand for billions of dollars in the market, this will have a significant impact on the price of Bitcoin. The institutions that offer ETFs will also be incentivized to sell this product as much as possible. Overall, Bitcoin ETF marks an important turning point and has a profound impact on the entire market.

The following is released by Cryptojoe on X (Twitter), compiled by Odaily Star Daily.

Why Bitcoin ETF is a watershed moment

ETF Approval -> ETF Trading

Using ETH futures ETF as an example, we can see how fast the ETF tool begins trading.

In this case, only 5 days were needed between approval and formal transaction. Why?

Because there is not a long time between expected demand and demand implementation. Assuming the gap is a few months, it is more likely that the market is "selling news".

Requirement Challenge

But if no one buys ETF, then all of this is irrelevant. So who will buy it? And why?

1. Golden mode

Historically, only two ETFs have reached a scale of $1 billion in the first three trading days:

Gold (2004) 

After the launch of the gold spot ETF in 2004, gold rose by 500% in the following 5 years. This data illustrates how important spot ETFs are.

  2. Why is a Bitcoin spot ETF a breakthrough?

Because it provides meaningful exposure to spot Bitcoin in a compliant manner globally. There are significant barriers to entry from KYC to custody to regulation that have prevented billions of dollars from entering. So, what are the types of investors?

For example, family offices, private banks, and hedge funds, their ideal product is a Bitcoin ETF.

I estimate that the market size in the investor circle below may be between 100-200 billion US dollars.

If there is a demand of 10 billion US dollars in the spot market, what will happen? Based on the current trading depth, it would take approximately 100 million US dollars to cause a 10% increase in the Bitcoin spot market.

However, ETF inflows may take some time and are influenced by the following factors: 

Halving

Credit tightening -> Quantitative easing

Geopolitical uncertainty.

However, from my personal perspective, I can clearly see the potential impact of ETF on Bitcoin prices.

费用为王：激励销售 ETH 的机构

translates to

Cost is King: Institutions incentivizing sales of ETH

ETF providers are motivated to sell the ETF as much as possible. In 2022, ETF fee income exceeded $100 billion, with an average fee rate of 0.37%. The total assets under management of ETFs are approximately $7 trillion.

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