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Famous Bitcoin advocate and former Google engineer Vijay Boyapati foresees a transformative change in individual investment with the potential approval of spot Bitcoin ETFs in the US. The groundbreaking product is expected to simplify the process of gaining exposure to the leading cryptocurrency and remove significant barriers for individual investors.
Breaking Down KYC/AML Barriers
Boyapati suggests that the approval of Bitcoin ETFs could change the game by unlocking “trillions of dollars” of potential investment currently held by individual investors.
Currently, buying Bitcoin with fiat currency involves numerous challenges, including custody issues, taxation complexities, and a general lack of understanding about cryptocurrencies. Additionally, new investors face stringent “Know Your Customer” (KYC) checks when trying to purchase BTC with existing fiat currencies.
These barriers significantly limit the potential investor base for Bitcoin, especially considering the asset’s inherent volatility. Overcoming these barriers can be perceived as a daunting task for investors due to the time, complexity, and the small portion of their portfolios allocated to such a volatile asset.
Spot Bitcoin ETF Approval: Simplifying the Investment Journey
The potential approval of Bitcoin ETFs in the US could revolutionize the landscape by allowing various types of investors to purchase Bitcoin seamlessly using existing brokerage accounts. This would eliminate the need for additional KYC/AML checks, providing a more accessible and understandable path for individual investors.
Currently, purchasing Bitcoin with fiat money through services independent of KYC is limited to dubious jurisdictions or involves significant transaction fees.
A Rush to Bitcoin
Boyapati predicts that ETF approval will encourage new investors to enter Bitcoin ownership by purchasing portions of the cryptocurrency through ETFs. This shift could be a significant turning point in how investors approach Bitcoin as an investment asset.
Conversely, industry leaders like BitMEX co-founder Arthur Hayes fear that liquidity will shift from “real” Bitcoin to BTC ETFs, creating another category of state-controlled traditional financial assets.
The momentum for Bitcoin ETFs has recently increased following meetings between asset managers BlackRock, Ark, and Grayscale with US SEC representatives. The SEC’s next decision date is set for January 10, 2024, and experts predict that the first batch of ETFs could be approved in the coming weeks.
