Approval of Spot Bitcoin ETFs: what do we need to know?

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Approval of Spot Bitcoin ETFs: what do we need to know?

On January 10, 2024, the Securities and Exchange Commission. (SEC) of the United States approved the ETF Spot Bitcoin. This is an important milestone for the cryptocurrency industry, as it makes it easier for the institutional investors invest in Bitcoin.

What are Spot Bitcoin ETFs?

The ETF Spot Bitcoin are exchange-traded funds that invest directly in Bitcoin. This means that the investors who purchase shares in a ETF Spot Bitcoin actually possess a portion of Bitcoin.

Before the approval of the SEC, the institutional investors could invest in Bitcoin only through derivatives, such as futures or contracts for difference (CFD). Derivatives are financial instruments that track the price of an underlying asset, but do not give the investor ownership of the asset itself.

Why is approval important?

The approval of the ETF Spot Bitcoin offers institutional investors a number of advantages over derivatives. First, the ETF Spot Bitcoin offer more direct exposure to the price of the Bitcoin. Second, the ETF Spot Bitcoin are generally more liquid than derivatives, which means that investors can buy and sell stocks more easily. Third, the ETF Spot Bitcoin are generally cheaper than derivatives, which means investors pay lower fees.

Fiscal aspects

L'approval of ETF Spot Bitcoin also has tax implications for investors. In Italy, the ETF Spot Bitcoin are subject to the same taxation of mutual funds, with some differences depending on whether they are "harmonized" or not.

Harmonized Bitcoin Spot ETFs.i

The Harmonized Spot Bitcoin ETFs Are in compliance with European regulations. In this case, the capital gain from their trading is considered "capital income" with a taxation of 26%, without the possibility of deducting any capital losses.

Non-harmonized Spot Bitcoin ETFs

The Non-harmonized Spot Bitcoin ETFs do not comply with European regulations. In this case, miscellaneous income taxed at marginal rates is produced with, in this case, the possibility of deducting any capital losses generated.

In general, capital losses realized from the sale of Spot Bitcoin ETFs are not taxed, unless the ETFs are non-harmonized. In this case, capital losses can be deducted from miscellaneous income.

Future Impacts

It is expected that the approval of the ETF Spot Bitcoin Will have a significant impact on the cryptocurrency. Analysts believe that approval could lead to:

  • An increase in the demand for Bitcoin: The ETF Spot Bitcoin will make it easier for the institutional investors invest in Bitcoin. This could lead to an increase in the demand for Bitcoin, which could in turn lead to an increase in the price of the Bitcoin.
  • An increase in the liquidity of the cryptocurrency market: The ETF Spot Bitcoin should increase the liquidity of the cryptocurrency market. This will make it easier for the investors buy and sell Bitcoin, which could lead to greater market volatility.
  • Greater acceptance of cryptocurrencies: The Approval of Spot Bitcoin ETFs. could help legitimize cryptocurrencies in the eyes of the traditional investors. This could lead to an increase in the'acceptance of cryptocurrency by the financial institutions and governments.

In conclusion

Overall, the approval of the Spot Bitcoin ETFs is an event positive for the cryptocurrency. It will make it easier for the institutional investors investing in bitcoin and could help legitimize the cryptocurrency in the eyes of the traditional investors. If you want to have a tax opinion on your cryptocurrency request a free consultation at Crypt&Co.

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