Bitcoin is increasing in value and may soon reach USD 100,000. The anticipation of a bitcoin exchange-traded fund, or ETF, is one of the key drivers of this bitcoin rally. The approval of the bitcoin ETF would signal mainstream acceptance and attract traditional investors who had previously been hesitant to invest in bitcoin. Another encouraging sign of the bullish momentum is Black Rock’s decision to launch a spot bitcoin ETF with a seed capital of USD 1,00,000.
The significant profit made by MicroStrategy from its bitcoin holdings exemplifies the potential financial gains it has in the current market. Now, a recent court decision requires the SEC to reconsider Grayscale Investment’s bitcoin ETF application, increasing the likelihood of an ETF approval. If all of this occurs, the price of bitcoin could rise to USD 1,00,000 by the end of 2025.
Another critical factor is that bitcoin will be halved in 2024. If the halving occurs, the price will begin to rise significantly again. With both Bitcoin and the stock market on the rise, which would you prefer for financial gains?
What is Spot Bitcoin ETF?
An ETF is a type of financial product that is traded on a stock exchange and tracks the price of a specific asset, index, or basket of assets. A spot bitcoin ETF must hold the underlying asset, directly reflecting its price, making owning its shares more similar to owning BTC itself.
What is Seed Capital?
Seed capital is the initial funding that enables an ETF to fund the creation units underlying the ETF, allowing shares to be offered and traded on the open market.
BlackRock disclosed that it received USD 1,00,000 as “seed capital” for its proposed bitcoin exchange-traded fund in a new application to the US Securities and Exchange Commission (SEC).
“The seed capital investor agreed to purchase USD 100,000 in shares on October 27, 2023, and on October 27, 2023, took delivery of 4,000 shares at a per-share price of USD 25.00 (the “seed shares”),” the filing said.
What Is Bitcoin Halving?
Bitcoin halving means that the reward for miners who process transactions on the Bitcoin network gets cut in half every 2,10,000 blocks mined (roughly every 4 years). So, instead of earning 6.25 Bitcoins per block, they’ll only get 3.125.
This is done to control the inflation of Bitcoin and make it more valuable over time, just like your cookies become more valuable when there are fewer available. There will only ever be 21 million Bitcoins in existence, and the halving ensures they’re released gradually.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.