How to Trade Bitcoin Spot ETFs: Lessons Learned from Gold ETFs – Florian Grummes

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(Kitco News) Markets are often counterintuitive, and there could be a few surprises in store if a spot Bitcoin ETF is finally approved, said Florian Grummes, managing director of Midas Touch Consulting.

For crypto investors looking to play a bitcoin ETF spot endorsement, there are key lessons to be learned from the introduction of gold-backed ETFs nearly 20 years ago, Grummes told lead anchor Michelle Makori. and editor of Kitco News.

“Remember that gold ETFs [did] not only bring glory and happiness to the gold market,” Grummes said. “They changed some things quite significantly, and something similar could happen with the Bitcoin ETF down the road.”

To learn more about the impact of gold-backed ETFs on the market, watch the video above.

Investors can expect plenty of institutional and retail buys to hit the crypto market if the U.S. Securities and Exchange Commission (SEC) approves a spot Bitcoin ETF. But it will probably buy the rumour, sell the fact script.

“The market assesses this potential over a period of time. And once it’s finally out, it’s time to take some profits,” Grummes explained. “You would think this is great news coming to market, but it sells because everyone has already positioned themselves [for the event].”

Digital asset investment products saw a third consecutive week of inflows last week on reports of spot Bitcoin ETF deposits. According to data provided by CoinShares, $136.1 million was invested in the various investment products tracked by the company, bringing the total for the past three weeks to $470 million.

Several spot Bitcoin ETFs have also been filed with the SEC over the past two weeks, naming Coinbase as a Supervisory Sharing Agreement (SSA) partner.

Grummes warned that Bitcoin investors would be giving up something essential with the introduction of a spot ETF. “Personally, I’m not a fan of ETFs at all. I understand that for retail investors, it’s an easy way to invest,” he said. “I prefer direct equity ownership. I also want to receive dividends directly and have voting rights. All those things you give up with the ETF structure.”

Bitcoin will hit $100,000 next year?

There are two major events on the horizon for Bitcoin a Bitcoin spot ETF and the upcoming halving. Once a reality, the Bitcoin price may reach $100,000 in 2024, Grummes pointed out.

“The halving with the Bitcoin ETF potentially approved, that would drastically change everything. And then $100,000 next year is very likely,” he said.

For more details on the BlackRock Spot Bitcoin ETF filing and potential surprises down the road, watch the video above.

The next Bitcoin halving is scheduled for April 2024, when the Bitcoin block reward will drop from 6.25 Bitcoin per block to 3.125 Bitcoin per block.

“Once the halving is over, we should be in a new bull market,” Grummes said. “All it takes is for Bitcoin to break above the $65,000-$69,000 resistance zone and then [$100,000] can finally happen quite quickly.”

For technical charts and analysis of where the price of Bitcoin might go next, watch the video above.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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