Approval of Bitcoin spot ETF will benefit institutional investors: Goldman Sachs | CoinDesk JAPAN

With the approval of a Bitcoin (BTC) spot exchange traded fund (ETF), institutional investors will be able to engage in alternative trading with low management fees, allowing them to more actively engage in arbitrage and option hedging. Goldman Sachs said in a report.

A physical Bitcoin ETF in the United States was finally approved on January 10, nearly 10 years after it was first proposed, in a move that dramatically widens access to the world’s largest cryptocurrency.

Other benefits of this product include: “Investor protection through ETFs, higher liquidity due to the ability to buy and sell compared to BTC access via private funds, and less tracking error compared to closed-end funds and trusts.” “ETF vehicles employ standard accounting and reporting processes from a portfolio management perspective.”

Goldman also said that investors can also gain exposure to BTC without the risks associated with self-custody, adding that the involvement of ETF providers such as BlackRock and Fidelity will help “manage these vehicles.” “experience and reliability,” he added.

However, it says investors should be aware of potential downsides.

“Demand across institutional investors may not be immediate,” Goldman said, adding that “long-term, sustained demand for spot Bitcoin ETFs will depend on product suitability and broader market adoption.” “It will depend on the situation,” he warned.

“Investors will not own physical BTC and will rely on the ETF manager’s ability to effectively execute its investment strategy,” the bank said, adding that the ETF’s trading hours will also be extended to the crypto exchange’s 24/7 trading hours. It added that in contrast to trading, trading is limited to predefined market hours.

Investors also need to be aware of market volatility after approval.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Shutterstock
｜Original: Bitcoin ETF Approval Is Likely to Benefit Institutional Investors: Goldman Sachs