Spot BTC ETFs made headlines as the media reported $28 billion in assets under management, but how significant is the figure?
The surge of spot Bitcoin (BTC) exchange-traded funds (ETFs) has become a focal point in financial markets, fueling speculation about their potential to outshine traditional assets like gold. ETFs are conveniently bought and sold on regular stock exchanges, simplifying the process for everyday investors to trade Bitcoin using their standard brokerage accounts.
Another benefit is these instruments are subject to regulatory oversight, breaking down barriers for mutual funds and professional finance managers who were previously unable to directly hold and manage digital assets.
ETFs have a unique way of maintaining their prices in line with the value of the assets they represent, involving a process called creation and redemption. This process plays a crucial role in managing the number of ETF shares available in the market and ensuring that the ETF price stays closely tied to the value of the assets it represents.
