If you perceived the news about the SEC and ETFs as some kind of incomprehensible nonsense - let's change that. In fact, it's all quite simple. The most interesting part is at the end: what is the benefit for us, ordinary mortals.
ETF is an exchange-traded fund or investment fund - a company that takes your money, invests it, multiplies it, and returns the profit to you. To invest in an ETF fund - you buy ordinary shares of that fund. Just like, for example, you can buy shares of Apple.
ETFs can invest in one cryptocurrency or several. When the price of cryptocurrencies rises, the value of the fund's shares also rises. They can be sold or dividends can be received.
Why do we need ETF funds if we can buy cryptocurrency on Binance? 😉😂
This is a convenient tool for large investors.
1. Availability
Legal entities (companies) often cannot buy cryptocurrency on exchanges due to legislative restrictions. But anyone can buy shares of the fund.
2. Security and clarity
Buying ordinary shares is a familiar and understandable process. There is no need to store cryptocurrency and ensure its security. No need to understand technical details.
3. Optimal investment management.
For a small fee, 'specially trained people' manage your money. ETF funds have dozens of analysts, expensive analytical software, and experience with investments. Plus, the fund can have several currencies at the same time, which reduces risks.
What is the SEC
This is the securities commission, which approves the creation of funds. Just like, for example, the Ministry of Health approves the creation of clinics.
The impact of ETF funds on the coin's price
❓So, the main question: how should we react to news about the new spot ETF SOLANA or LITECOIN?
👉 As a hint. Rest assured, ETFs are not created just like that; large investors have already prepared their money and are just waiting for the final signature from the SEC.
Creating a spot ETF fund, for example SOLANA, means that the opportunity to invest in SOL is opened for large companies and investors.
It is believed that the launch of the first spot Bitcoin ETFs in the USA was the reason for the rise of Bitcoin in 2024.
What spot ETFs exist or are being prepared for launch:
- Bitcoin-ETF - approved in January 2024
- Ethereum-ETF - approved in May 2024
- Solana-ETF - first consideration by the SEC today (January 2025)
- XRP-ETF - application submitted
- Litecoin-ETF - application submitted
Now you understand how we are still at the beginning of the journey?😉
Something tells me it's time to buy 👇
