Weekly Analysis: Bitcoin ETF
This week, with the news of a bitcoin ETF being imminent, let’s have a look at what an ETF is and why a bitcoin ETF is big news for the crypto market and investors in general.
An Exchange-Traded Fund (ETF) is a type of investment fund that trades on stock exchanges, much like individual stocks. ETFs are designed to track the performance of a specific index, commodity, bonds, or a basket of assets. They offer investors the opportunity to diversify their portfolios and gain exposure to various asset classes without directly owning the underlying assets.
Key features of ETFs include:
Diversification: ETFs typically hold a diversified portfolio of assets, which can help spread risk and reduce the impact of volatility associated with individual securities.
Liquidity: ETFs can be bought or sold throughout the trading day at market-determined prices. This provides investors with flexibility and the ability to enter or exit positions quickly.
Transparency: ETFs generally disclose their holdings on a daily basis, allowing investors to know exactly which assets the fund holds at any given time.
Low Costs: ETFs often have lower expense ratios compared to mutual funds, making them a cost-effective investment option for many investors.
Flexibility: ETFs cover a wide range of asset classes, including stocks, bonds, commodities, and currencies. Investors can choose from a variety of ETFs to suit their investment goals and risk preferences.
Tax Efficiency: ETFs are structured in a way that minimises capital gains distributions, which can help investors reduce tax liabilities.
Intraday Trading: Unlike mutual funds, ETFs can be bought and sold throughout the trading day at market prices, allowing investors to react to market movements in real time.
Investors can use ETFs to gain exposure to specific sectors, industries, or asset classes without the need to buy individual stocks or bonds. ETFs provide a convenient and cost-effective way to build a diversified investment portfolio while offering the potential for long-term growth.
The introduction of a Bitcoin exchange-traded fund (ETF) is important for several reasons, as it could potentially broaden the appeal and accessibility of Bitcoin as an investment vehicle. Here are some key reasons why a Bitcoin ETF is significant:
Mainstream Adoption: A Bitcoin ETF could facilitate the entry of institutional and retail investors into the cryptocurrency market who may be more comfortable investing in a regulated and familiar investment vehicle, such as an ETF. This could potentially lead to increased mainstream adoption of Bitcoin.
Regulatory Approval and Oversight: The approval of a Bitcoin ETF by regulatory authorities could signify a level of acceptance and oversight of the cryptocurrency market by regulatory bodies. This could provide a sense of legitimacy and transparency, potentially reducing concerns about fraud and market manipulation.
Easier Access for Investors: An ETF structure would make it easier for investors to gain exposure to Bitcoin without having to directly purchase and store the cryptocurrency. This could attract a broader range of investors who are interested in participating in the potential gains of Bitcoin without dealing with the complexities of digital wallets and private keys.
Risk Diversification: A Bitcoin ETF would allow investors to diversify their portfolios by adding exposure to the cryptocurrency market alongside traditional asset classes. This diversification could potentially help reduce overall portfolio risk by providing an alternative asset with a low correlation to traditional financial markets.
Market Liquidity and Price Discovery: The introduction of a Bitcoin ETF could potentially improve market liquidity and price discovery in the Bitcoin market. The increased trading volume and liquidity associated with ETF trading could contribute to a more efficient and transparent price determination process for Bitcoin.
Market Stability: A Bitcoin ETF could contribute to increased market stability by providing a regulated and standardized investment vehicle for investors. This could potentially mitigate some of the extreme price volatility often associated with the cryptocurrency market, making it more attractive to risk-averse investors.
Market Integration: The introduction of a Bitcoin ETF could help integrate the cryptocurrency market with traditional financial markets, potentially leading to increased recognition and acceptance of cryptocurrencies as a legitimate asset class among traditional financial institutions and investors.
I think we will see further upside in the $. I’m targeting the 110 area.
Uncertainty in the world = strong gold. See my last blogpost.
Didn’t get to $100 a barrel level. Still above the 200 EMA though.
Targeting the 40k level now -see this week’s post.
You can also follow us on Twitter https://twitter.com/marcwalton
Red flag news:
First week of a new month so it’s going to be busy.
EUR/USD: Looking for shorts. I’m looking at the 1.0700 area to enter.
USD/CHF: Looking to long form 0.9080
GBP/USD: Short from 1.2400
AUD/USD: Short from 0.6600. See the video for my idea on the shorter timeframes.
NZD/USD: Short from 0.6100. See the video for my idea on the shorter timeframes.
USD/CAD: Long from around 1.3480
USD/JPY: Still leaving alone for now.
EUR/GBP: Long from 0.8650
EUR/CAD: Short from 1.4640 * See video
AUD/CAD: Short from 0.8900
GBP/AUD:1.9200 to short.
GBP/CAD: 1.6850 to long.
GBP/CHF: See video for an update on the pattern we have been following.
AUD/NZD: Long from 1.084
As always, remember correlation! -Especially when taking more than one JPY trade!
M3 -Shorter timeframes.
I do my analysis on daily and weekly charts first and make a note of the MAJOR areas of support and resistance. Then copy them onto Pierre’s Earth and sky template. Then I make a note of the weekly & monthly pivots points and add them to the charts. You will see lots of opportunities line up during the week. The important thing then is to select a bias for the next few days and do NOT take trades if the price is too near a trend line or pivot. Ideally, you want to buy when the price is near a major support and or pivot point line and has the potential to make at least 40 pips. Vice versa for a short.
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
Watch the video below for more detailed explanations of this week’s analysis and trade plan (click the 4 arrows bottom right to view full-screen):