A Bitcoin ETF is a watershed moment, according to a cryptocurrency trader who previously worked at the world’s second-largest bank. In a series of tweets, the trader who goes by the handle CryptoJoe explained why he believes a Bitcoin ETF is “buy the rumour, buy the news.”
What you'll learn 👉
Why This ETF Matters
Unlike previous Bitcoin ETFs that were based on futures, this new ETF provides exposure to actual Bitcoin. CryptoJoe explains that this allows meaningful exposure to Bitcoin in a regulated way globally, something that has not been possible before due to barriers around KYC, custody, and regulation.
He estimates there is a total addressable market of $10-20 billion from investors like family offices, private banks, and hedge funds who have been waiting for a Bitcoin spot ETF.
Potential Impact on Bitcoin Price
If even a fraction of that demand materializes, CryptoJoe believes it could have a significant impact on Bitcoin’s price due to the relatively thin order books in the spot market. For example, he notes that it would only take around $100 million to move the Bitcoin price 10%.
While it may take time for ETF inflows to build, CryptoJoe sees clear potential for the ETF to positively impact Bitcoin’s price, especially in the context of the halving cycle, quantitative easing, and geopolitical uncertainty.
Incentive Alignment
Finally, CryptoJoe points out that ETF providers have strong incentives to sell as much of the ETF as possible, given the fee revenue opportunity. With over $100 billion in ETF fees collected in 2022, providers will likely market the Bitcoin ETF aggressively.
In summary, the unique nature of this Bitcoin spot ETF, potential demand, thin order books, and provider incentives lead CryptoJoe to believe the launch could fuel further gains for Bitcoin. His advice is clear – buy the rumour and buy the news when it comes to this ETF.
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