|
|
After a decade of twists and turns, the U.S. Securities and Exchange Commission (SEC) finally approved the listing of a Bitcoin spot exchange-traded fund (ETF) on January 10, 2024. In just three days, the Bitcoin spot ETF attracted a significant amount of funds, sparking widespread discussions. We believe that the listing of the Bitcoin spot ETF will help increase trading activity, liquidity, improve the pricing system, and lower the threshold for overseas qualified investors to participate in Bitcoin investments.
From the perspectives of trading costs, convenience, liquidity, and security, we compared various overseas Bitcoin investment instruments, including the primary market (direct trading of Bitcoin or Bitcoin futures) and the secondary market (Bitcoin spot ETF and Bitcoin futures ETF). The conclusion is that the safety of the secondary market is higher, trading costs are lower, and portfolio management is more convenient compared to the primary market. Among them, the fees for Bitcoin spot ETF are lower than those for futures ETF. The largest Bitcoin ETF in terms of assets under management is currently Grayscale's GBTC, with a total AUM of $2.86 billion, surpassing the largest Bitcoin futures ETF AUM ($2.28 billion).
Bitcoin is expected to experience three positive factors in 2024: halving, the rise of the Bitcoin ecosystem, and expectations of a rate cut by the Federal Reserve. 1) Bitcoin miner rewards halve every four years, and in the six months following the previous three halvings, the Bitcoin price has significantly increased. The fourth halving is expected to occur in April this year. 2) After the launch of Ordinals (a Bitcoin-based digital content encoding method) in December 2022, the user base increased significantly, leading to the strong development of the Bitcoin ecosystem and the first-time surpassing of Ethereum in on-chain transaction fees in six years. 3) FED Reserve Board members expect the real GDP growth rate in the U.S. to be 1.4% in 2024, with the federal funds rate at 4.6% (compared to 5.4% in 2023). A rate cut could lead to an increase in the supply of the U.S. dollar and its depreciation, potentially driving more demand for Bitcoin due to its inflation-resistant properties.
The approval of the Bitcoin spot ETF also has an impact on the stock prices of related overseas-listed companies, primarily mining companies, trading platforms, and holding companies. The business model of mining companies involves "upfront investment-later harvesting," with upfront costs gradually diluting as the Bitcoin ecosystem matures and trading volume grows. Trading platforms generate revenue from transaction commissions and establish competitive barriers through economies of scale. Holding companies initially acquire large amounts of Bitcoin at relatively low costs, enjoying capital gains over time. |
|
Post time 5-2-2024 10:14:39