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After a decade of twists and turns, the U.S. Securities and Exchange Commission (SEC) finally approved the listing of Bitcoin Spot 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 pricing systems, and lower the investment threshold for overseas qualified investors.
From the perspectives of trading costs, convenience, liquidity, and security, we compared various overseas Bitcoin investment instruments, including primary markets (direct trading of Bitcoin or Bitcoin futures) and secondary markets (Bitcoin Spot ETF and Bitcoin futures ETF). The conclusion is that the secondary market is safer, has lower trading costs, and offers more convenient portfolio management compared to the primary market. Among them, Bitcoin Spot ETF has lower fees than the futures ETF. Currently, the largest Bitcoin ETF by assets under management is GBTC, issued by Grayscale, with a total AUM of $2.86 billion, surpassing the largest Bitcoin futures ETF AUM of $2.28 billion.
Bitcoin is expected to experience three positive factors in 2024: halving, the rise of the Bitcoin ecosystem, and expectations of a Fed interest rate cut. 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 in April this year. 2) After the launch of Ordinals (a digital content encoding system based on Bitcoin) in December, the user base has surged, leading to the continuous emergence of new and old protocol layers on the blockchain. This has driven the strong development of the Bitcoin ecosystem and pushed Bitcoin's on-chain transaction fees to exceed Ethereum for the first time in six years. 3) A Fed Reserve Board member predicts that in 2024, the U.S. real GDP growth rate may be 1.4%, and the federal funds rate may be 4.6% (compared to 5.4% in 2023). Interest rate cuts may trigger an increase in the supply of the U.S. dollar and a devaluation, potentially leading to increased 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, mainly mining companies, trading platforms, and holding companies. The business model of mining companies can be summarized as "early investment - later harvest." As the Bitcoin ecosystem matures and trading volumes grow, the upfront investment gradually dilutes, and later returns become stable or steadily increase. Trading platforms generate revenue from transaction commissions and exhibit characteristics of "water sellers." Head trading platforms establish competitive barriers with scale advantages. Holding companies, having acquired a large amount of Bitcoin at relatively low costs in the early stages, enjoy capital gains. |
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Post time 31-1-2024 20:47:30