ETFs are the new darling of the crypto industry. These listed investment funds traded on secondary exchanges have recently received the support of Justice and there is significant confidence that regulators will accept them. This made ETFs (‘exchange-traded funds’). The rise of Bitcoin, in turn, increases the price of the cryptocurrency.

Because, as is the trend in recent years, as soon as something attracts attention, all investors look at it. It’s a vicious cycle happening right now with ETFs.

Court victory sparks interest in ETFs. A United States court confirmed that the SEC’s decision regarding ETFs was arbitrary, as it found there was virtually no difference between “holding Bitcoin” and “investing in Bitcoin.” The two financial products are “closely related,” making it difficult to “manipulate the price of Bitcoin.”

This victory for advocates of these Bitcoin exchange-traded funds suggests that the SEC, the American regulatory body, will finally accept them. And interest skyrocketed.

And the Bitcoin price is noticing this. By comparison, Bitcoin has increased its market value by nearly $170 billion since the end of August, when the judge’s decision became known. Bitcoin has already surpassed $35,000, a value it has not reached since May 2022. An increase of more than 30% in just over two months, as Reuters points out, is mainly driven by ETFs and investors like BlackRock. During this time, gold rose only 3.7%.

The SEC is expected to approve ETF regulation. Investors such as Grayscale and BlackRock have already submitted formal requests to launch their own ETFs. They are waiting for the SEC to give the signal to start. But small investors are also excited about this financial product based on Bitcoin futures. The ETFs themselves are also rising as there is expectation for the future.

These ETFs actually carry very little money. This is where the problem comes into play. As the Financial Times explains, there are very few Bitcoin ETFs available today. 29 global ETF funds were identified as active, holding a total of approximately $5.6 billion in securities. About $3.1 billion of those are backed by Bitcoin, according to ETFs. The rest are mutual funds and various unspecified futures.

The Financial Times reflects that the crypto industry has high hopes for these ETFs, but the figures show that their actual volume is very small. Of the $170 billion that the Bitcoin market has grown in the last two months, only $5.6 billion is related to ETFs.

So why is Bitcoin rising? So, although analysts state that the increase in Bitcoin’s value is due to ETFs, data shows that the weight of ETFs is 30 times less. The hope in ETFs, which we can define as fictitious ETFs, is 30 times more meaningful than the real impact of these exchange-traded funds on futures contracts.

Now it’s the ETFs’ turn, and tomorrow it will be halved. It will be seen in the past. And the financial newspaper’s announcement goes further: “Following historical demand, these ETFs probably won’t even be revolutionary for the providers themselves. All will likely be forgotten next year, when the next ‘halving’ comes around.”

Bitcoin price rises and falls depending on the latest trends. ETFs, a financial product that has received approval from the authorities in these months but whose impact is much smaller than the rise of Bitcoin, would have us believe this.

Image | Arthur Mazi

in Xataka | Bitcoin, detailed guide: what it is, how it works and how to get it