There's a lot of talk & excitement about imminent Bitcoin ETFs.

What is a #Bitcoin ETF and why does it matter?

"An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges.

ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars." - Wikipedia

Typically, ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way a regular stock can.

An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities.

ETFs can even be structured to track specific investment strategies.

The first ETF was the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index and remains an actively traded ETF today.

A #BitcoinETF is an investment fund that allows you to gain exposure to the price movements of Bitcoin.

They trade on traditional stock exchanges like the NYSE or NASDAQ, making them accessible to investors who may not be comfortable with or know how to directly purchase and hold Bitcoin.

There are two main types of Bitcoin ETFs:

1. Spot Bitcoin ETFs:

• These ETFs directly hold Bitcoin as their underlying asset.

• They track the real-time price of Bitcoin as closely as possible, similar to how a gold ETF tracks the price of gold.

2. Bitcoin Futures ETFs:

• These ETFs don't hold actual Bitcoin but invest in Bitcoin futures contracts.

• Futures contracts are agreements to buy or sell a specific asset at a predetermined price on a future date.

• By investing in Bitcoin futures contracts, the ETF can track the price movements of Bitcoin indirectly.

Till now, Bitcoin ETFs in the US can only hold Bitcoin futures contracts or stocks of companies and other ETFs with exposure to cryptocurrency.

That is likely to change this week.

According to Fox Business, BlackRock, the world’s largest asset manager, expects the SEC to approve its application for a spot Bitcoin ETF as soon as Wednesday.

Several other leading assets managers, including Fidelity, Grayscale Investments, Valkyrie, ARK 21Shares and Invesco, expect their applications to be approved very soon.

Why does this matter to the crypto industry?

Many expect these ETFs to bring billions in fresh funding into the cryptocurrency sector.

The price of bitcoin has skyrocketed in recent months, signaling enthusiasm for the prospect of exchange-traded products that hold bitcoin.

But the real win would be a strengthened sense of legitimacy for the industry.

And the tacit acknowledgement from the powers that be that blockchain/crypto/web3 are ultimately inevitable.