How Bitcoin ETFs will Impact the Cryptocurrency Market

A Bitcoin exchange-traded fund (ETF) would track the price of bitcoin, but allow investors to trade it during regular stock market hours. It would let investors buy and sell bitcoin without having to go through a cryptocurrency exchange, which can be confusing for beginners, and let them avoid the hacks that have plagued such exchanges in the past.

If approved by U.S. regulators, a Bitcoin ETF could attract hundreds of millions of dollars from institutional investors like hedge funds, which have been wary about trading cryptocurrencies on unregulated exchanges. That could push up demand and prices for bitcoin, as well as other cryptocurrencies like Ethereum and litecoin.

Bitcoin ETFs are not new – the Winklevoss twins tried unsuccessfully to get one approved in 2013, for example. But several new proposals have emerged in recent months, with three applications under consideration by the Securities and Exchange Commission: VanEck/SolidX (VANECK), GraniteShares (GRN) and Direxion (DIREXION). The SEC has also recently started reviewing a proposal from ProShares (PROSHARES) to create two Bitcoin ETFs.