There are several types of assets that you can invest in in 2024, and cryptocurrency may be a new additional viable option for retirement accounts. This is a new asset class, with some countries open to using blockchain technology more than others. Bitcoin is the primary asset in the cryptocurrency asset class.
In December 2023, Bitcoin surged to nearly $45,000, marking a staggering 170% increase from its value at the year’s onset. This expected revival was embraced by cryptocurrency enthusiasts, sparking some cautious celebration. According to Stafford Thorpe Tokyo Japan, 2024 is pivotal for the Financial Technology industry. Several Bitcoin Exchange-Traded Funds (ETF) applications are pending approval with the United States Securities and Exchange Commission (SEC).
Reports indicated a slow but sure process with the US-SEC, suggesting that approval timelines might be delayed. Before deeply diving into Bitcoin ETF’s implications on retirement accounts, let’s address some technical terms.
Bitcoin and Bitcoin ETFs
Bitcoin, a digital currency, operates without central regulation on the blockchain. Its transactions are verified through blockchain networks by computers, with a fixed limit of 21 million Bitcoins expected to be mined by 2140.
Bitcoin ETFs are Exchange Traded Funds that invest in Bitcoins. These ETFs are listed on formal stock exchanges, allowing investors to buy or sell them like stocks. They serve as a bridge for those seeking exposure to Bitcoin’s potential without directly navigating its intricacies and risks.
What do experts say?
Stafford Thorpe Tokyo Japan reviews show several responses to the upcoming Bitcoin ETF approval. Jacquelyn Melinek, TechCrunch’s senior cryptocurrency reporter, cited sources that the SEC appears poised to approve a bitcoin spot ETF for multiple firms’ applications.
Fox Business’ Eleanor Terrett highlighted anticipated amended filings and last-minute discussions concerning comments and launch dates, projecting a potential approval timeline. Bloomberg analyst James Seyffart echoed this sentiment, foreseeing potential approval orders and anticipating amendment filings addressing discussions between the SEC and issuers.
Bloomberg’s senior ETF analyst Eric Balchunas urged caution, indicating ongoing final comments from the SEC with issuers soon to submit their final 19b-4s and S-1s. He emphasized the proximity to a potential approval but clarified the need for official confirmation.
Form 19b-4
SEC Form 19b-4 serves as a notification tool for the Securities and Exchange Commission (SEC) regarding proposed rule changes by self-regulatory organizations (SROs), by Rule 19b-4 under the Securities Exchange Act of 1934.
SRO
SROs are non-governmental entities vested with regulatory powers within specific industries or professions. Examples within the financial sector include stock exchanges like the New York Stock Exchange (NYSE) and Nasdaq, registered clearing agencies such as the Depository Trust & Clearing Corporation (DTCC), and the Municipal Securities Rulemaking Board.
Form S-1
SEC Form S-1 is the inaugural registration document mandated by the SEC for U.S.-based public companies introducing new securities. For any security meeting the specified criteria, an S-1 filing is a prerequisite before its shares can be listed on a national exchange like the New York Stock Exchange.
Typically, companies file SEC Form S-1 in preparation for their initial public offering (IPO) to furnish details on capital proceeds’ utilization, outline their current business model and competitive landscape, and offer a concise prospectus of the planned security. It covers aspects such as the pricing methodology of the offering and potential dilution effects on existing listed securities and provides a window into the company’s inner workings.
Crypto Market Reactions
Bitcoin traders are anticipating an end to the recent trend of stagnant price movements. Insights from Cointelegraph Markets Pro and TradingView indicate tightening volatility in Bitcoin’s value during the past weekend. Market sentiment remained apprehensive, primarily centered on how BTC/USD might respond to the impending decision on the United States’ inaugural spot Bitcoin exchange-traded fund (ETF), slated for a verdict by January 10.
Forecasts suggest a potential short-term setback for bullish trends, commonly called a “sell the news” event, in the wake of this significant development. Nevertheless, some analysts see the possibility of an immediate upward spike, challenging crucial psychological thresholds.
Regardless of the anticipated direction, various indicators hint at an imminent breakout from the current narrow price range. One such indicator, the Bollinger Bands volatility measure, displays a contraction on daily timelines, often a precursor to an impending expansion in the trading range.
A trader and commentator, Matthew Hyland, noted the Bollinger Bands’ further constriction leading into the ETF’s week. Another trader, Daan Crypto Trades, highlighted the resurgence of the “spot premium” in Bitcoin markets, indicating cautiousness among derivative traders following last week’s abrupt liquidations. He emphasized that prolonged consolidation in this price zone could lead to increased accumulation of positions, potentially triggering stop-losses or liquidations placed above and below the current price level.
Bitcoin ETF will open doors to other Crypto Assets
Anticipating Bitcoin ETF approvals, Stafford Thorpe Tokyo Japan reviewers see that VanEck investment firm pledged a portion of expected ETF profits to Bitcoin Brink’s Bitcoin core developers, solidifying their commitment to the crypto space. VanEck already made a $10,000 initial donation, emphasizing a long-term dedication beyond mere speculation in Bitcoin. Gabor Gurbacs from VanEck anticipates that a spot ETF could generate substantial long-term value. Retirement accounts may benefit from having Bitcoin ETF because of its potential for long-term gain.
The approval of a U.S. spot Bitcoin ETF is a significant goal for crypto enthusiasts and may be a pivotal moment for official adoption. Should the Bitcoin ETF be approved, it may open the doors to approve other crypto assets. Such a product would track Bitcoin’s price, offering investors exposure without the complexities of direct ownership. Major investment firms like BlackRock, Fidelity, and Invesco have filed ETF applications with the SEC, joining others such as GlobalX, WisdomTree, Valkyrie Funds, Ark/21Shares, and Galaxy Digital.
Andrew Parker