Bitcoin spot ETF could be approved soon will demand match hype?
A bitcoin exchange traded fund (ETF) approval could catapult the entire crypto market to a multi trillion dollar market capitalization, with so much speculation and emphasis surrounding it approval the crypto space awaits a new financial break even in high trading volume, added liquidity and lock up staking activities which could revive investors high hope in the future of cryptocurrencies, what seem to be a boring space since the last hype of decentralized finance (DeFi) and non fungible tokens (NFTS) could yet be seen as a new hyped up since the ETF approval saga started this show a bitcoin ETF is a catchy investment feature for multi million dollar institutions and investors to invest in.
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With BlackRock interest lately on bitcoin spot ETF shows there are high momentous interest surrounding a bitcoin ETF, this event reminds us how Tesla, Elon musk and other public figures in 2021/22 bull run showed interest in accumulating more bitcoin this sort of high profile institutions and public figures interest in crypto adoption always makes the market pump up as greed becomes the order of the day with speculations of security exchange commission (SEC) standing between the verge of approving an ETF soon, accumulating bitcoin at low price has been priority of most investors this rally don't just have positive impact on bitcoin other altcoins have lately been reacting to every price increase an ETF approval news.
Experts suggests an ETF approval merged with bitcoin halving could be one of the biggest bull market witnessed in the crypto space with speculation of bitcoin surpassing $100k but could the hype of bitcoin ETF approval match investors demand or would it get hyped and cool off like what we witnessed during DeFi and NTF hype?
Why so much hype on an ETF
An ETF share can be bought and sold in traditional stock exchange markets, it holds reserve of actual bitcoin which always corresponds to the number of issued shares which mean each institutions that has got an ETF approval will possess certain amount of bitcoin holding in it reserve which can be traded by investors it is typically structured as trust fund with shares issued to investors when the share price of a bitcoin ETF goes up the price of bitcoin as well goes up as well as downside movements of price.
Another reason why there is much hype on a spot bitcoin ETF is the security and convenience it gives to investors it is seen as a more secure means of investing in bitcoin price movement when compared to owning it directly as such holder will not need private keys or worry about wallet custody, the regulatory oversight surrounding a bitcoin ETF provides investors with sense of security and transparency overall an ETF makes bitcoin accessibility more easier for institutions and other traditional financial users holding bitcoin in their portfolio making adoption more accessible for investors.
These aforementioned reasons are why there is so much hype about a bitcoin ETF approval the flexibility it provides both in terms of investment, regulation and adoption makes it more reasonable why there is so much hype and speculation around an ETF approval, indeed an ETF approval hype has taken the entire crypto market to keep speculating how price will surpass previous bull all time high but a good question still remains will bitcoin break even surpassing it previous bull high by catapulting market capitalization to amass trillions dollar worth of investment what happens if speculation surrounding ETF fails to meet investors demand?.
Will demand match the hype?
What was considered as hype during DeFi and NFT frenzy did not happen to meet users expectations the hype surrounding those two bull market triggers quietly cooled off after the bull market in 2021/22 we witnessed a drastic drop in NFT demands with DeFi locked up liquidity been reduced to minimal compared to their consecutive hype.
With web3, bitcoin halving and bitcoin ETF approval hype causing excitement for almost all cypto enthusiasts and analysts will they trigger the next bull market can their hype be sustainable long term?
Looking at how it all went down in the past we can speculate this new hype triggers could drive an exceptional demand in the market short term speculation of price rally can be bet on but what happens after everyone has been all caught up with the ETF hype, web3 and bitcoin halving.
For now we can only rely on the past events on how it went down with NFTS and DeFi their rally were short lived although they are still a thing for most investors.
Short term demand on a spot ETF approval could exponentially skyrock the price of bitcoin and altcoins but looking at long term demand we can ascertain that an approved spot ETF will create a more favorable environment for crypto investment which will drive demand high certainly we can suggest that short term hype could be matched but long term demand could create a conducive atmosphere for crypto adoption and investment.