Bitcoin is about to get a whole lot easier to buy.
That’s because the United States should soon have its first bitcoin ETF.
An ETF (exchange-traded fund) is one of the most popular securities to own. There are ETFs that track indices, commodities, bonds, or a basket of stocks.
They also trade like regular stocks… making them easier for any investor to buy and sell — including big-time institutional investors. In fact, most major money managers put the bulk of their clients’ money into ETFs.
That’s why this ETF is such a big deal.
It could send billions of dollars pouring into Bitcoin.
That would obviously be extremely bullish for the price of bitcoin.
CBOE Global Markets just applied for a Bitcoin ETF license. It filed the application with the Securities and Exchange Commission (SEC), a government agency responsible for protecting investors.
This is significant because CBOE Global Markets is one of the world’s largest exchange holding companies.
That said, this isn’t the first time that a big investment firm has tried to get its own bitcoin ETF. Other major entities like VanEck Funds have also tried and failed.
Last month, the SEC ruled that bitcoin is not a security:
The SEC is right to insist that the digital coins, such as bitcoin, which are replacement for sovereign currencies, such as the dollar, sterling, yen, and euro, are not securities.
Because of this, there’s no worry about bitcoin ETFs being unregistered securities. That’s why many people think the SEC will now approve the CBOE’s application.
The CBOE could have its own Bitcoin Fund by 2019. And that’s a huge deal. In fact, this single decision could ultimately cause the price of bitcoin to skyrocket.
Why? The same thing happened with gold 15 years ago.
You can see in the chart below. It shows what gold did after the first gold-backed ETF was introduced in early 2003.
You can see that gold jumped more than 5X after the first gold-backed ETF was introduced in March 2003.
After all, gold became much easier to buy after the introduction of gold ETFs. Everyday investors could buy gold with the click of a mouse… and own it in their retirement accounts.
In short, Bitcoin can go on an explosive run once the first U.S. bitcoin ETF rolls out. Not only that, Bitcoin should head much higher than 5X: it’s still early days for Bitcoin. The cryptocurrency has only been around since 2009. Not only that, the current market value is less than $120 billion.
Bitcoin could go parabolic once a bitcoin ETF comes to the United States.
That said, I wouldn’t wait until this bitcoin ETF is introduced to speculate on bitcoin.
By buying bitcoin now, you could front-run this coming tidal wave of institutional money.
Just remember to treat bitcoin like a speculation. This means you should keep your position sizes rational… and never bet more money than you can afford to lose.
