Crypto ETF: 5 Ways Bitcoin ETF Can Help NFTs in Long Term

I remember the headline “Bitcoin is dead” after almost every
crash. Some optimistic news outlets would put a question mark to soften the
blow. What was once dismissed as a “Bitcoin bubble” now has a new financial
reality with a marketcap of $900 billion. Bitcoin Spot ETF approval will bring
in new investors, and the effect will trickle down to the altcoins and niche
markets like NFTs and blockchain games.

Crypto ETF: Bitcoin Gets SEC’s Approval:

Crypto ETFs or Bitcoin Spot ETFs are the Exchange Traded
Funds that track the price of Bitcoin offer a more straightforward approach
to trading Bitcoin. The ETFs represent the value of Bitcoin that you can hold
without actually buying Bitcoin. The value of the Bitcoin ETF always equals the
spot Bitcoin price.

Blackrock and many other prominent names were trying to seek
Bitcoin Spot ETF approval from the Security and Exchange Commission (SEC). On
January 9, 2024, around 3:11, “SEC grants approval for Bitcoin ETFs” is tweeted
from the official X handle of SEC.

This swiftly sent the price to the moon, followed by a
bearish rally as the news was misleading. 25 minutes later, Gary Gensler, an
official from the SEC, revealed that the SEC’s account was hacked and no ETFs were
approved. At 3:38, the SEC regains control of the account and deletes all the
tweets related to ETF approval.

On January 11, Bitcoin ETF was approved, and Bitcoin gained nearly 11% – reaching a high of $48,700 within hours. Bitcoin whales were trying to pump the price of Bitcoin, as indicated by EL Capo of Crypto in his Telegram Channel:

Whales want the 48k-50k asks filled… Strong rejection from the 48k-50k resistance zone. It shows big players are selling there. Whales haven't filled all the asks, so it could still touch 50k before reversal.

Why is Bitcoin ETF so significant?

Bitcoin Spot ETF approval from the SEC is a long-anticipated
decision and a significant milestone in the mainstream adoption of Bitcoin and
crypto. Bitcoin will now play a bridge between the mainstream financial ecosystem,
altcoins, and other blockchain products.

Bitcoin has always been at the forefront of the crypto,
which, with the SEC’s approval of ETF, is opening the door of institutional and
retail investments to the crypto market. Following are the three main reasons
why Bitcoin ETF is so significant for the crypto market:

1. Credibility of Bitcoin: Though it has been more than a decade since
   the inception of Bitcoin, it is still considered a hostile asset to invest in
   for many. This approval is a certificate of Bitcoin legitimization of Bitcoin
   and adds to its credibility.
2.  Big Fishes are Coming: With
   the BTC spot ETFs, Bitcoin is now open to traditional stock exchanges, which
   means that institutions and retail investors will have access to it. This will
   bring in trading volumes of billions of dollars. Bitcoin is in the driving seat
   of crypto, and if it flourishes, so does the entire market of altcoins.
3. Liquidity and Stability: With the increased marketcap and liquidity
   inflows to Bitcoin, the price of Bitcoin will stabilize over time. Bitcoin’s
   exposure to stock exchanges means less volatility and price manipulations by
   crypto whales.

5 Ways Bitcoin ETF can benefit NFTs:

Most of the NFTs driven by hype and fake utilities have lost
most of their value. The optimistic teams behind many projects have abandoned
their projects and communities. The NFT market has been on a bearish trajectory
since early 2022, and it hasn’t recovered yet.

One of the prominent reasons for the fall of the NFT market
is the devaluation of crypto tokens. All NFTs are valued in crypto tokens, and
when the price of these tokens plummets, it triggers a bearish wave for these
digital assets.

With the approval of BTC Spot ETF, we are already in a semi-bullish
market. As the price of the crypto tokens is appreciating, the NFT market is
slowly recovering. Moreover, the ETF gives crypto exposure to a new class that
could be inclined to explore the NFT world. Here are 5 ways BTC ETF can benefit
the NFT market:

Wealth Effect:

The ETF approval will not only mount the buying pressure on
Bitcoin, but it will also bring a new community to the market. We know NFTs
from their insanely high prices. This new community can start that again, and
once NFTs start making headlines, the wealth effect can shift the trend of NFTs
to bullish.

NFT projects like Bored Ape Yacht have now become a class
and a status symbol. Imagine someone buys a blue chip NFT, and that makes
headlines. It can create insane buying pressure and demand for these assets.

Credibility and Legitimization:

Now that Bitcoin has become a part of the bigger game, so is
crypto and crypto niches, including NFTs. NFTs were being adopted by Instagram,
Spotify, Apple, etc. already. However, with this new phase of legitimization
and trust that ETF provides, the NFT market becomes more credible and mature.

Innovation and NFT 2.0:

The first-generation NFTs were offering similar utilities
and were mostly driven by the hype. With institutional interest driven to NFTs,
the new era of NFT 2.0 starts that offers real use cases and a community-oriented
approach. This new influx of investors could kickstart innovation and
advancement in the NFT space.

NFTs and Traditional Marketplace:

You may classify NFTs as a micro niche of crypto, but their
role in the web3, blockchain games, tokenization, and metaverse cannot be
overstated. Bitcoin becoming mainstream makes NFTs an attractive place for
investors to explore to expand TradeFi, GameFi, and Metaverse.

Integrating the traditional marketplace with NFTs can open
new opportunities for investors, developers, and creators.

Smooth Regulatory Compliance:

Once NFTs are in the limelight again, they will draw massive
attention to themselves. The growing interest in NFTs might attract regulatory
watchdogs who can provide more clarity on these digital assets. Once the NFTs
are well regulated, the giant companies are more likely to invest and innovate.

Takeaway:

As a pioneer, Bitcoin is leading the crypto to mainstream
adoption, and the benefits are not limited to Bitcoin only. NFTs, the assets
valued in crypto tokens, can directly benefit from the bullish wave in crypto. Major
Blockchains like Ethereum, Solana, Polygon, and WAX can all benefit from these
positive sentiments in the market and prepare for the upcoming bullish trend of
the NFT space.