The approval of a Bitcoin ETF could be delayed due to the currently depressed liquidity in the Bitcoin market. A recent report suggests that the liquidity of Bitcoin has dropped significantly, which could potentially scare off regulators from approving an exchange-traded fund (ETF) for Bitcoin. This is because low liquidity can lead to substantial price swings, impacting investors negatively.
In addition to the current state of Bitcoin’s liquidity, the overall volatility of the cryptocurrency market is another factor that regulators are closely monitoring. With the unpredictable nature of the market, ensuring the protection of investors becomes a challenge. As such, until Bitcoin and the broader cryptocurrency market can demonstrate more stability, the approval of a Bitcoin ETF may remain on hold.
