The New York Stock Exchange files for Bitcoin futures with the SEC, bringing ETF's one step closer.

This is big.

An ETF - an exchange-traded fund - as I mentioned in earlier articles - is the big time. Unlike Bitcoin futures, which are merely side-bets on the value of Bitcoin traded and settled in U.S. dollars with no direct repercussions on the actual price of Bitcoin, ETF's do have a direct impact on the value of the traded asset.

The reason is, an ETF exchange functions as an entity who holds the value for the client that is purchased via the ETF. In other words, the entity must themselves hold the currency - resulting in a direct supply-and-demand impact on the market. So, when a client purchases an ETF, say 1 BTC, the ETF entity itself holds that value in BTC. Therefore, it directly affects the market value, unlike futures.

Now, to be clear, this proposal by the NYSE is still technically for futures contracts. The NYSE is planning to launch funds to track Bitcoin futures, again, settled in USD currency, but it brings Bitcoin one step closer to full-blown ETF's.

This would have a massive impact on the value of Bitcoin. The cryptocurrency market, as much as it has grown over the last year, is still tiny compared to the mainstream stock market. All stock exchanges in the world hold a sum in value of nearly $70 trillion - with a "t". The entire cryptocurrency market is valued around $600 billion. The NYSE alone gives access to around $18 trillion in stocks.

If Bitcoin is approved for ETF's by the SEC, there is no telling how high things may go.

One concern that could hold things back: futures are generally considered a step toward legitimacy for Bitcoin, but since Bitcoin futures are settled in USD, not in Bitcoin, they do not lend the same aura of legitimacy as they otherwise could. This is one of the greater barriers to the SEC considering allowing Bitcoin ETF's. If it is approved eventually, put on your seat-belts!

*This is not professional trading advice - just my opinion!

sources:

https://cointelegraph.com

http://www.visualcapitalist.com/all-of-the-worlds-stock-exchanges-by-size/

https://www.nyse.com