Home Wealth Management What a US bitcoin ETF may imply for Canadian traders, advisors?

What a US bitcoin ETF may imply for Canadian traders, advisors?

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What a US bitcoin ETF may imply for Canadian traders, advisors?


Learn extra: Former Citi execs plan ‘SEC free’ Bitcoin-backed securities | Wealth Skilled

Connors explains that the US approval of a Bitcoin ETF was made doubtless within the autumn of 2023 after the SEC selected to not attraction the ruling by Choose Neomi Rao of the US Courtroom of Appeals for the DC Circuit in August which dominated that the SEC couldn’t reject the proposal to checklist shares of the Grayscale Bitcoin Belief as an alternate traded product. Since its resolution to not attraction, Connors says the SEC has been extra proactive in its work with ETF issuers, providing them suggestions and steerage to get their merchandise permitted. 

Connors predicts that the approval of US bitcoin ETFs ought to have large upside potential for the asset. Along with the demand uptick from US institutional cash managers, he expects extra traders to be drawn to what he considers bitcoin’s ‘good volatility,’ the truth that typically spikes in Bitcoin volatility include important motion to the upside moderately than simply to the draw back.

That stated, Connors notes that many traders have already misplaced out on their bitcoin holdings, largely as a result of important volatility they’ve skilled prior to now. However, those that held the cryptocurrency have largely been rewarded, with bitcoin ending 2023 because the best-performing asset. Connors views bitcoin as a really totally different form of asset, and whereas he says 3iQ’s base case is bitcoin rising to between $110,000 and $160,000 (USD) per coin by the tip of 2024, he expects there to be volatility to each the upside and draw back alongside the way in which. He doesn’t advocate for day buying and selling in bitcoin or utilizing leverage to spend money on the cryptocurrency.

As any looming ETF approvals collect headlines and probably drive up bitcoin costs, Canadian advisors might start to discipline extra questions from their shoppers concerning the cryptocurrency. He believes that this can be a second for advisors to broaden and deepen their understanding of the baseline dynamics of bitcoin. They need to be capable of ask and deal with questions round points like bitcoin’s volatility, its provide and demand dynamics, its alleged use as a prison forex, and the power required in bitcoin mining. No matter an advisor’s view on bitcoin, the approval of US ETFs, and the resultant modifications in demand dynamics, must be greeted as a possibility for schooling.

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