Former Google engineer and renowned Bitcoiner Vijay Boyapati indicated possible effects of Bitcoin ETFs for retail investors. If approved, the new product might streamline the process of getting exposure to the largest cryptocurrency in many ways.
Bitcoin ETF to remove KYC/AML barriers for potential BTC investors
Bitcoin ETF approval might be of paramount importance for unlocking the potential of “trillions of dollars” stored by retail investors, The Bullish Case for Bitcoin author Vijay Boyapati opined on his X account today, Dec. 23, 2023.
Now, buying Bitcoin (BTC) with fiat is associated with too many hurdles in terms of custody, taxation and general understanding of the cryptocurrency concept. Also, new investors are subject to stringent “Know-Your-Customer” checks when trying to purchase BTC via existing fiat on-ramps.
These roadblocks dramatically reduce the potential investor base for Bitcoin (BTC), let alone the fact that the majority of investors are only ready to allocate a tiny fraction of their portfolios to such a volatile asset:
For many average investors overcoming these hurdles just doesn’t seem worth it. Time and complexity are a huge filter (which is why most early Bitcoin investors tended to be quite intrepid in their investing outlook)
The approval of Bitcoin ETF in the U.S. will allow investors of various types to purchase Bitcoin (BTC) with their existing brokerage accounts, removing the need for extra KYC/AML checks.
Right now, buying Bitcoin (BTC) with fiat on KYC-neutral services can only happen in shady jurisdictions or is associated with big transactional fees.
Three weeks before green light? SEC allegedly set “final deadline”
Boyapati concluded that owning a fraction of Bitcoin (BTC) via an ETF would motivate its new investors to shift toward “physical” Bitcoin (BTC).
In contrast, BitMEX co-founder Arthur Hayes is concerned about the potential migration of liquidity from “real” Bitcoin (BTC) to BTC ETFs, which would be yet another class of state-controlled TradFi assets.
As covered by U.Today previously, the Bitcoin ETF euphoria accelerated in the past days. Yesterday, heavyweight asset managers BlackRock, Ark and Grayscale reportedly met with representatives of the U.S. SEC.
The next SEC decision deadline expires Jan. 10, 2024; some experts are sure that the first batch of ETFs will be approved in 20 days.