It is official, the United States Security and Exchange Commission has approved spot Bitcoin as a form of exchange-traded fund. This means that traditional investors can now trade or invest in Bitcoin as they would do with shares and securities. With conventional exchanges needing to adjust to the increased demand, this article will outline why everyone should trade Bitcoin ETF with Tectum SoftNote.
Before outlining the benefits of using SoftNote for trading Bitcoin, it is essential to understand what trading ETFs entail. This will help everyone understand why this approval is a huge step in the right direction. In addition, we also need to identify the underlying problems of using the standard BTC network for transactions.
Why Bitcoin ETF Trading is a Monumental Achievement
Bitcoin ETF is a process whereby an asset management company allows people to trade and invest in cryptocurrency like a stock, share, or traditional security. People tend to confuse ETFs for futures, where people also trade without holding the asset. While they may seem similar, they are clearly different.
With futures contracts, traders predict the direction of the token price. On the other hand, ETFs focus on spot Bitcoin and allow people to buy and sell BTC at a specific price. It is almost like buying “Bitcoin shares” without having to deal with any of its complexities.
The approval of Bitcoin ETF as a recognized security is a significant milestone for web3. Following this approval, people can openly buy, sell, and invest in BTC like they would with shares, stocks, bonds, and other commodities. Institutional investors who have been skeptical now have substantial reasons to capitalize on this opportunity.
In addition, this development will demand clearer regulations of Bitcoin. The SEC will need to formulate very precise laws guarding the ownership and utilization of Bitcoin. It will no longer be the case of lumping very diverse digital assets together. In simpler terms, the SEC will be forced to understand and appreciate blockchain, crypto, and DeFi to fulfill their duty of protecting users.
Finally, the approval of spot Bitcoin ETF is beneficial for all “altcoins” as they are popularly called. Humans are curious, and it is only a matter of time before people start to ask questions about other cryptocurrencies. With the regulators understanding how web3 and crypto trading work, it will become easier for projects with proper use cases to gain approval.
Challenges of Trading Spot Bitcoin ETF
So far, we have outlined the good part. However, there are still a few hiccups associated with the process of trading spot Bitcoin ETF. As mentioned earlier, it is not just any platform that can facilitate spot Bitcoin ETF trading. Like with all “brokers'< these companies will charge a percentage for their services.
As gotten from CoinDesk, here are details of the commissions of the different companies offering spot Bitcoin ETF:
- BlackRock – 0.2% (with plans to increase to 0.3%)
- Bitwise – 0.24%
- VanEck – 0.25%
- ARK Invest – 0.25%
- Franklin – 0.29%
- Fidelity – 0.39%
- Valkyrie – 0.80%
- Greyscale – 1.5%
These figures above are the amount people will be charged every time they use the spot Bitcoin ETF services of these companies. If someone buys $100,000 worth of BTC ETF from Greyscale, for example, they will be charged a fee of $1500. This is a significant sum and may discourage people from trading spot Bitcoin ETFs.
However, there are certain developments that are very disturbing. Some ETF providers plan to waive fees before charging people as much as 59% after 6 months. Others are planning to increase their initial percentage as time goes on. In a bid to make more money and stay “competitive”, several companies are employing shady tactics.
Why Users Should Trade Bitcoin ETF With Tectum SoftNote
Like with regular crypto transfer, Tectum SoftNote is set to revolutionize how people trade spot Bitcoin ETFs. The fastest layer 1 blockchain network has cemented its spot as the best solution for making Bitcoin payments. People can send Bitcoin for free, while merchants only pay a 1% commission.
Tectum is bringing the principle of efficiency and affordability, which we are popular for, to ETF trading. Users will be able to own, trade, and invest in crypto for a commission of 0.1%. This means that anyone buying $100,000 worth of BTC ETF will only pay $100. This is a steal, especially when compared to what is available with the competition.
The best part is that we will not be increasing the commission that people have to pay when trading Bitcoin ETF with Tectum SoftNote. Since launching the fastest layer 1 blockchain network, we have maintained the 1% merchant commission. Therefore, traders and investors are certain that this project is not employing any dirty trick to lure and trap them.
While not having to deal with the complexities of owning actual Bitcoins, users who purchase Bitcoin ETF via Tectum SoftNote will maintain ownership of their assets. This is not the usual case of “give me your money and take a representation of Bitcoin”.