We all know about BTC ETF, big companies like BR and VG is pushing crypto by introducing BTC ETF.
Let’s understand how this work. I cannot give examples of another company due to copyright, so let’s give example of our company.
When a person, comes with a specific amount of money, let’s say 100k USD, either directly to our office, or video consultation with our AM department or on our AI powered website, we ask them 4 common questions .
1. Total project investment amount in a year.
2. Estimated hold time.
3. Risk tolerance.
4. Expected growth.
5. Religion (not available in all companies.)
Based on that we suggest them a personalised plan. More or less all fintech companies, VC and AM does these in the same way.
Now, based on all of these, we put their funds on several financial markets like crypto, forex, stock and startup. If someone looking high growth but low risk tolerance, we invest 20-30% of his money on BTC. If they are looking for high growth and high risk, and he is none Muslim, we go for short term trading with leverage. If they are looking for low but consistent growth and safe investment we go for Forex hedging etc etc.
So now if all companies start BTC ETF, everyday the companies will buy BTC for their clients if the client subscribes in a strategy where BTC involved. So we will see a constant growth for BTC.
However, for ETH ETF, we cannot say the same. ETH is not fully decentralised. A company controls the currency, so I cannot ensure that ETH ETF will make gradual increases of ETH price.
But these 4 things will happen:
1. ETH gas fee will increase.
2. Projects based on ETH will require high maintenance fee as ETH gas fee increases.
3. We will see less ETH based project and more independent projects in feature.
4. Although it shows that BTC dominance will get reduced, but opposite will happen due to point 1,2,3.
So I will say ETH ETF is bullish for ETH and BTC, but bearish for small ETH based projects in long run.
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