Global Market Accumulates 20 Active Bitcoin ETFs, Collectively Valued at $4.16 Billion

2023-11-22, 03:25

The derivative market has 20 active spot Bitcoin exchange traded funds (ETFs).

Canada has 7 spot bitcoin ETFs valued at $2,003 million.

The United States is currently uating several spot bitcoin ETF applications.

Keywords: spot bitcoin exchange traded fund, BTC ETFs, bitcoin ETF, bitcoin ETF approval, SEC vs. spot bitcoin ETF, crypto ETF

Introduction

The crypto sector is undergoing various changes including the introduction of crypto exchange traded funds (ETFs). Crypto ETFs play a significant role in the digital asset investment sector as they help to increase the demand for the underlying assets.

Although the world has 20 active spot bitcoin ETFs more are likely to come onto the market in the near future, especially in the United States

This article discusses the 20 active spot bitcoin ETFs and their impact on the cryptocurrency sector. We will also assess the obstacles the United States is facing in its roadmap to approve bitcoin ETFs.

The World has 20 Active Spot Bitcoin ETFs

Currently, there are a total of 20 active spot bitcoin exchange traded funds (ETFs) around the world, with a total value of $4.16 billion. Unfortunately, the United States does not have any spot BTC ETF at the moment, despite having more than 10 applications.

Notably, the 20 active BTC ETFs are spread among 8 countries only that include Canada, Germany, Liechtenstein, Guernsey Brazil, Australia, Jersey, and the Cayman Islands. Therefore, if the United States approves one or more spot bitcoin ETFs it will become the 9th country to do so.

Historical Development of Spot Bitcoin ETFs on the World Stage

Germany’s ETC Group Physical Bitcoin, introduced on the market in June 2020, was the first spot bitcoin ETF. The next spot bitcoin exchange traded funds were 3iQ The Bitcoin Fund and VanEck Bitcoin ETN, launched in quarter 4 of the same year.

As you can see, a total of 3 BTC ETFs were launched in 2020. Incidentally, these spot BTC ETFs were introduced during the early stages of a great crypto market Bull Run. Remarkably 2021 became an important year for crypto ETFs since 14 of them were launched during that period.

For instance, Purpose Bitcoin ETF, CI Galaxy Bitcoin ETF (BTCX) in Canada, and CoinShares Physical Bitcoin (BITC) were launched in the first quarter of 2021. On the other hand, only one spot BTC ETF, Australia-incorporated Global X 21Shares Bitcoin ETF (EBTC), was launched In the second quarter of 2022.

Finally, 2 BTC ETFs were introduced in 2023, the Jacobi FT Wilshire Bitcoin ETF (BCOIN) and Valour Bitcoin Carbon Neutral (1VBT). The following table gives greater details of the existing spot crypto ETFs.

20 Active Spot Bitcoin ETFs – CoinGecko

As hinted above, the 20 active bitcoin ETFs are spread among 8 countries, listed in the next table.

Distribution of Spot Bitcoin ETFs among 8 Countries - CoinGecko

As you note in the table, Canada is the country with the highest number of spot BTC ETFs. In fact, it has 7 such spot bitcoin exchange traded funds, with a total investment of $2 billion. With that, the value of Canada’s spot BTC ETFs accounts for 48.2% of the total market.

Jersey, with 4 ETFs, has the second highest number of BTC ETFs valued at $748 million. Next on the line is Germany-incorporated ETC Group Physical Bitcoin (BTCE), launched in 2020 which is valued at $803. The remaining spot crypto ETFs have relatively smaller values ranging between $5 million and $296 million each.

The United States Awaits Bitcoin ETF Approval

With countries like Canada, Germany, Australia and Brazil having at least one spot bitcoin ETF the market wonders why the United States does not have a single spot bitcoin exchange traded fund. However, at the moment the Securities and Exchange Commission is uating at least 10 spot bitcoin ETF applications.

If the SEC grants bitcoin ETF approval their global value may increase significantly and influence other countries to do the same. It is important to note that the United States is taking a cautious approach before the introduction of crypto ETFs.

The SEC vs. spot bitcoin issue centers on the issue of transparency and accountability in the market. Specifically, the SEC wants to ensure that there is no possibility of market manipulation before approving any crypto ETFs. Already, the SEC is engaging with several asset management firms like BlackRock.

Nonetheless, there is a high possibility that the SEC will approve the spot BTC ETFS. Grayscale says, “The SEC should approve spot bitcoin ETFs to trade in the US. What’s more, their previous approval of bitcoin futures ETFs shows that they are already in a position to do so.”

Bitcoin ETF Approval: Catalyst for the Largest Crypto Bull Run

The bitcoin ETF approval in the United States is likely to push the price of BTC up, which may lead to a bull run. We will analyze the possible impact of spot bitcoin approval on BTC price using the example of gold.

In March 2003, the world’s first Gold ETF was launched in Sydney, Australia. Also, in October 2004 the SEC approved StreetTracks Gold Trust (GLD). That resulted in a sustained increase in the price of gold.

However, the situation was different starting from November 2004 when the U.S. Gold ETF was listed on the New York Stock Exchange (NYSE). The price of gold dropped by 9% during the market consolidation period. However, its value rose significantly over the years.

According to DGF, the introduction of gold ETFs resulted in a market bull run that lasted for 10 years. Therefore, DGF has concluded that the launch of spot bitcoin ETFs in the United States will likely have a similar effect. Primarily, the approval of gold ETFs allowed individuals and corporate investors to invest in gold without holding it.

Thus, after the approval of bitcoin ETFs in the United States the market is likely to undergo a consolidation period to absorb more capital. This will result in a drop of Bitcoin price. However, in the long run more investors will enter the market and inject much capital which will force its price to rise, leading to a potential Bull Run. Since the price of bitcoin is correlated to that of most altcoins, that will result in a crypto bull market.

Conclusion

There are 20 active spot bitcoin ETFs in the world now. Canada, Germany, Liechtenstein, Guernsey, Brazil, Australia, Jersey, and the Cayman Islands are the countries that have BTC ETFs. In the meantime, the US SEC is in the process of uating several crypto ETFs.

FAQs about Bitcoin ETFs

What is a spot bitcoin ETF?

A spot bitcoin is an investment asset whose value is based on the price of bitcoin. This is a regulated traditional investment vehicle which is traded on stock exchanges. As such, it is not traded on cryptocurrency exchanges.

Which ETF is best for bitcoin?

A spot exchange traded fund (ETF) directly tracks the price of bitcoin. The best spot bitcoin ETF at the moment is Purpose Bitcoin ETF (BTCC) which is valued at $819.11 million. The other popular spot bitcoin ETFs include ETC Group Physical Bitcoin (BTCE), CI Galaxy Bitcoin ETF (BTCX), CoinShares Physical Bitcoin (BITC), Hashdex Nasdaq Bitcoin ETF (BITH11) and WisdomTree Physical Bitcoin (BTCW).

Is an ETF good for bitcoin?

Spot bitcoin ETFs are good for bitcoin because they increase the demand for the coin. They also lead to more financial inflows into the coin which is likely to push its price up.

Author: Mashell C., Gate.io Researcher

*This article represents only the views of the researcher and does not constitute any investment suggestions.

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