Bitcoin ETFs surge after US SEC approval boosts annual ROI

Having received approval from the US Securities and Exchange Commission (SEC) for 11 Bitcoin exchange-traded funds (ETFs), the cryptocurrency is seeing a resurgence, boosting its annual return on investment by over 150%. This surge has been aided by a predicted Bitcoin halving in April, leading to the cryptocurrency reclaiming its top position for asset annual ROI.

The decision by the US regulator to give its official endorsement to spot Bitcoin ETFs saw Bitcoin prices soar to US$48,494 per unit in early 2024, before settling around the US$42,000 mark. This is still a fair way off its record high of US$69,044.77, which was achieved on November 10, 2021.

Udomsak Rakwongwan, a researcher from the Mathematics Department at Kasetsart University and co-founder of the decentralised finance (DeFi) platform FWX, anticipates continued growth for the cryptocurrency market in 2024.

With the US SEC’s approval, Bitcoin ETFs – funds whose price mirrors that of Bitcoin and can be traded on regular exchanges – are now a viable investment for those wary of restrictions. This development could usher in a new era of investment opportunities and significantly boost Bitcoin trade.

Increased liquidity in the cryptocurrency market is forecasted as more traditional investors opt for Bitcoin, thereby reducing price volatility. Furthermore, as ETFs are now officially regulated products on major US exchanges, they are likely to attract more institutional investors to Bitcoin.

The 11 Bitcoin ETFs approved for US exchanges include the ARK 21Shares Bitcoin ETF, Bitwise’s Bitcoin ETP Trust, Fidelity Wise Origin Bitcoin Trust, Franklin Bitcoin ETF, Grayscale Bitcoin Trust, Hashdex Bitcoin ETF, Invesco Galaxy Bitcoin ETF, iShares Bitcoin Trust, Valkyrie Bitcoin Fund, VanEck Bitcoin Trust, and WisdomTree Bitcoin Trust.

Investors

Whilst Bitcoin ETFs are gaining traction worldwide, the Thai SEC currently only permits institutional investors and high-net-worth investors to invest in them through securities companies.

The halving phenomenon, a significant event for Bitcoin’s blockchain where the mining reward is halved, is predicted to occur in early to mid-2024. Typically, the price of Bitcoin follows a particular pattern during a four-year halving, comprising of a bull run period, a bear market, and a sideways up period, reported Bangkok Post.

Sanjay Popli, CEO of Cryptomind Advisory, anticipates large institutional investors will invest their money in spot Bitcoin ETFs. His prediction for the end of 2024 sees investments from institutional investors reaching over US$10 billion.

Sanjay also advises investors to keep an eye on the inflation cycle, the Fed’s interest rate policy, and the outcome of the US presidential election, all of which could significantly impact the Bitcoin price trend for the next 3-5 years.

For investment strategies, Sanjay suggests investing more heavily in Ethereum and related coins than in 2023, anticipating that Ethereum will receive approval for ETF trading by the US regulator.