Bitcoin ETF Approval Unlocks Blockchains Full Potential and Supercharges Web3 Adoption

Bitcoin has been brought to Wall Street and is now effectively backed and accepted by the SEC and the US Government.

I have been working in the blockchain industry for may years now, and harping on about it for the same amount of time. The prospect of an SEC approved Bitcoin ETF has always felt like an uphill battle for us moonboy degens, and as I see raised eyebrows matching the murmurs of — “oh, they finally did it?” — today feels like a big step towards the democratization and betterment of our financial systems.

Let’s have a quick look at why.

WTF ETF?

Firstly, what is an ETF?

An ETF (Exchange-Traded Fund) is an investment vehicle that is publicly traded and tracks the performance of an underlying asset or index, rather than one company.

Think of a basket that holds a bunch of different investments, such as stocks or bonds. The shares of this basket are traded on a stock exchange and allows you to invest in a variety of assets without having to buy each one individually. It’s an easy way to diversify your investments, reducing your overall risk.

Owning Bitcoin (BTC) isn’t a simple process. For a layman the act of opening an exchange account, doing KYC, understanding digital and hardware wallets, private keys, self-custody, taxes, capital gains blah blah etc etc… is a daunting task.

It would be much easier to buy some shares in Bitcoin where all that admin is taken care of by a regulated and trusted entity… cue the Bitcoin ETF.

A Bitcoin ETF lowers the barrier significantly to buy and benefit from owning BTC. It works the same as a normal ETF, an investor buys shares via whatever brokerage they buy stocks, and can trade them the same way you would trade shares in Apple. Instead of a basket of different assets, the basket now solely represents the value of Bitcoin. If the value of Bitcoin goes up, the value of your ETF shares will go up too. If it goes down, the value of your ETF shares will go down as well.

The Big Boys are Officially Here to Play

Wednesday’s decision to approve a Bitcoin ETF means that everyday investors will soon have access to BTC just as they do when buying a Tesla stock. This is great for the punters, but what the decision really provides is the ability for the big boys (institutional players, pension, mutual funds etc) to confidently invest in BTC. This leaves the door wide open for mass adoption at an unprecedented scale.

A research report by crypto firm Galaxy Digital reveals that in its first year alone, the Bitcoin ETF could generate at least $14.4B in inflows from institutional investors. An impressive figure considering that existing traditional products like trusts and futures have a total value of roughly $21B today. Furthermore, the report predicts inflows could reach $27B from the Bitcoin ETF in the second year, and $39B in the third.

Hectic.

A Tidal Wave of Liquidity and Innovation Will Revolutionize the Internet

The invention of blockchain technology, and subsequently its first use as Bitcoin, champions the decentralization of our systems.

Matched with this surge in liquidity, the emerging tide of blockchain can now turn into a tidal wave and flush out the frailties of a tired and beaten traditional financial system. The shifting sentiment of governments, regulatory bodies and institutions cements the business case for Web3 and will push the use of decentralized applications into the hands of millions, and then potentially billions of people.

Blockchains foundational infrastructure has matured significantly, with clearer compliance and regulatory frameworks complimenting the growth. The general acceptance of blockchain as a tool for change is even creeping into dinner table conversations.

This big push allows the decentralized version of the internet to evolve into its full form. As more websites, platforms and applications become decentralized, a revamped version of the web will enhance internet accessibility, transparency, inclusivity, and democracy. This has far reaching implications for societal privacy, self-sovereignty and online security.

A lack of education, clunky user experiences and worries of blockchains scalability and effects on the environment, still plague the average investor. But this industry is rooted in solving big problems, and with an influx of liquidity and innovation, you can put the house on knowing that the answers to these problems are already floating in the ETHer.

Down the Rabbit Hole You Go

Reading the Bitcoin white paper and then buying BTC are the first steps in participating in a new financial system. One of those has been made easier in the last 24 hours, and the other you can tick off here. By legitimizing BTC and giving institutional players the ability to access it, the whole blockchain space and its idealistic values have now been amplified like never before.

For tech heads, what comes next is jumping down the rabbit hole of the next-gen of tech and industry. Decentralization can touch much more than just digital cash. Combining its values with the future of industry — AI, automation and robotics, gleams a better future for everyone, not only those at the top.

Learning more about this will make you THE voice of reason down at the pub or at the next party. Now all you need to do is hold your breath and grit your teeth when the volatility slaps and everything should work out jusssst fine (not financial advice).

Bless — Tanu ✌🏾