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Here's what a bitcoin ETF actually means for investors
  + stars: | 2024-01-11 | by ( Ryan Browne | ) www.cnbc.com   time to read: +4 min
A false statement saying the regulator had approved a bitcoin ETF was published Tuesday on the SEC's social media account on X, formerly known as Twitter. CNBC runs through everything you need to know about the bitcoin ETF milestone. As crypto investors look to assess what the market impact of a bitcoin ETF might be, many are comparing Wednesday's news to the greenlighting of the SPDR Gold Shares ETF — the first-ever spot gold ETF — in 2004. A bitcoin ETF opens up the audience of people and institutions that can buy and sell bitcoin to those with little experience trading cryptocurrency. "There is now a U.S. bitcoin spot ETF, and bitcoin is no longer considered shady or infamous.
Persons: Vijay Ayyar, Ayyar, Kevin de Patoul Organizations: . Securities, Exchange, U.S, Ark, Twitter, CNBC, Locations: BlackRock, Invesco, U.S
Yet investors aiming to amp up their bets face an ominous obstacle: a lack of liquidity that could trigger wild price swings. Slippage, a liquidity measure describing how much prices change between the placement and execution of a trade, has also increased. The vanishing liquidity can be traced back to the collapse of Sam Bankman-Fried's FTX exchange and hedge fund Alameda Research. Until then, "liquidity is probably going to get worse and worse", said Joseph Edwards, investment adviser at Enigma Securities. "Even if some players haven't left the place, they are on the sidelines right now because of what's happening with banking turmoil," Edwards said.
It aims to reduce the risks for consumers buying crypto, making exchanges liable if they lose investors' assets. The saga has set back adoption of crypto assets by "one or two years," according to Evgeny Gaevoy, founder and CEO of crypto market maker Wintermute. ConsolidationMany new companies and projects emerged in the years that followed the 2018 crypto winter — FTX among them. Marieke Flament, Near's CEO, said the firm had limited exposure to FTX — though the collapse was still "a surprise and a shock." Fears have risen over the financial health of other major crypto exchanges after FTX's failure.
Brussels-based crypto market maker Keyrock has raised $72 million in new funding. The startup, founded in 2017, has brought in funding from crypto settlement platform Ripple. Keyrock wants to double the size of its team despite the downturn in the wider crypto market. Keyrock offers two sides of a trade – in this case digital assets – and acts as an intermediary between the bid (purchase) price and the ask (sale price). The funding comes from crypto settlement platform Ripple, SIX Fintech Ventures, and Middlegame Ventures.
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