A New Dawn in Crypto: How Spot Bitcoin ETFs Boost Adoption, Reshape Regulation

The dynamic landscape of the cryptocurrency industry witnessed a groundbreaking development when the U.S. Securities and Exchange Commission (SEC) officially approved 11 spot Bitcoin exchange-traded funds (ETFs).

This pivotal development has ignited a fervent discourse surrounding its potential implications, particularly with regard to market stability, investor sentiment, and the ongoing regulatory deliberations within the United States.

David Bailey, the chief marketing officer at Azteco, a consumer Bitcoin platform supported by Jack Dorsey, shared his insights on these important topics and discussed the implications of this decision for the broader cryptocurrency industry.

Spot Bitcoin ETFs and BTC Confidence Boost

The approval of spot Bitcoin ETFs in the U.S. was one of the biggest events in the cryptocurrency industry, which brought a lot of promise to the nascent sector.

But, what can the crypto community expect from this historic development?

"It's important to remember that Bitcoin is a very different thing from the broader 'crypto industry,' Bitcoin was originally designed for people to make electronic payments, whereas most crypto/altcoins seem to have little use beyond being highly speculative assets," Bailey told International Business Times in an exclusive interview.

"The SEC's approval of spot bitcoin ETFs (and the subsequent inflows of capital from globally respected firms like BlackRock) will definitely boost confidence in bitcoin. This in turn will help to drive consumer adoption of bitcoin as a solution for everyday payments, international remittances, and personal savings," the Azteco CMO added.

Regulatory Approval

Asked whether the SEC's recent approval of spot Bitcoin ETFs exerted influence on the country's regulatory stance concerning cryptocurrencies, Bailey stated that while regulation can be beneficial, it should not be seen as a panacea for every challenge.

In his astute analysis, Bailey drew attention to a fundamental query: the necessity of regulating Bitcoin, considering it is fundamentally a technological innovation akin to the Internet itself.

Bailey, who is also the co-founder and CEO of Aitrak, a platform that offers AI solutions for brands, retailers, and advertisers. also raised a crucial question: the need to regulate Bitcoin, since it is a technology just like the Internet.

"It's worth noting that the SEC's approval was somewhat reluctant and contained a highly prejudiced description of bitcoin as being 'used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.' Arguably, it was companies like BlackRock that drove this decision, not the SEC," Bailey told IBT.

"Unfortunately, regulation has a history of being used to stifle or control innovation. Look at how telecom companies with vested interests tried to use regulation to hinder the growth of innovative services such as Skype and WhatsApp," he said, adding, "Bitcoin is a global technology (much like the internet). Why does it need regulation from local governments?"

"Also, regulation is not the answer to every problem (or even most problems) and it's highly questionable whether Bitcoin really needs more 'regulation' from anyone like the SEC. In the near future, more and more consumers will start using Bitcoin wallet apps like Jack Dorsey's Bitkey to securely manage bitcoin on their smartphones, so they won't even need to use exchanges," Bailey further said.

Sustained Price Volatility

During our exclusive interview, IBT asked the experienced marketing executive whether the persistent price volatility witnessed within the cryptocurrency market can be ascribed to inherent factors.

In response, Bailey said, "The long-term value (and price stability) of Bitcoin depends on how quickly and extensively it's adopted by mass market consumers as a solution for their everyday payments, international remittances, and personal savings. If more people start using Bitcoin in their everyday lives (instead of just storing it), the demand will increase and then the price stability will improve."

The advent of Spot Bitcoin ETFs is anticipated to engender a process of normalization for Bitcoin within the purview of consumers, effectively setting it apart from the negative connotations associated with other cryptocurrencies.

Mainstream Bitcoin Adoption, Finally?

This perceptual transformation may indeed generate heightened interest in Bitcoin, particularly as users come to recognize the convenience of managing it through smartphone applications.

However, the pivotal question remains: Will this heightened interest ultimately translate into mainstream adoption?

"Consumers will arguably take more notice of BlackRock (and others) investing billions in a spot bitcoin ETF than they will of the SEC's begrudging approval. The popularity of spot bitcoin ETFs will help to normalize Bitcoin in the minds of consumers and separate it from negative perceptions that surround crypto/altcoins. This in turn will generate more consumer interest in bitcoin as a solution for everyday payments, especially when they realize that they can use smartphone apps on their phones to manage their Bitcoin," the Azteco CMO said.

"There are over a billion adults in the world who have a smartphone but don't have a bank account. This means that they have an internet connection and can send WhatsApp messages to anyone anywhere in the world, but they can't make online payments. Bitcoin is an ideal solution for these unbanked, under-banked, and cash-by-choice consumers," he further said, emphasizing that the U.S. is behind others when it comes to Bitcoin consumer adoption.

"The US is arguably behind in the consumer adoption of Bitcoin. In many parts of the world, bitcoin is used by consumers for everyday payments, international remittances, and personal savings. For example, the Pick n Pay supermarket chain in South Africa now has over 2,000 stores where you can pay for your groceries using Bitcoin," Bailey noted.

Bitcoin Halving Event

Certainly, no discussion concerning Bitcoin would be complete without delving into the Bitcoin Halving event, scheduled for 2024. This event is expected to reduce the Bitcoin mining reward to 3.125 BTC per block from 6.25 BTC per block, carrying significant implications for the bitcoin price and the overall cryptocurrency industry.

IBT also questioned Bailey about the potential ramifications on the cryptocurrency's network resilience and its capacity to allure a wider spectrum of adoption.

"Bitcoin has already proved its reliability and resilience over the last 10+ years (again, setting it apart from the crypto/altcoins). It's also become quicker and cheaper to use with the introduction of secure second layers such as the Lightning Network. The upcoming halving event will generate more awareness and interest in Bitcoin. This in turn will help to drive consumer adoption of Bitcoin as a solution for everyday payments, international remittances, and personal savings," the Azteco CMO said.

"The next watershed moment for bitcoin will be when mass market consumers realize that they don't need to use an exchange or an ETF to own bitcoin. Smartphone apps like Bitkey (from Jack Dorsey) allow people to manage bitcoin securely on their phones, while gift cards from companies like Azteco allow people to buy bitcoin in small amounts," he added.

As the cryptocurrency landscape continues to evolve, the acceptance and understanding of Bitcoin among regulators, investors, and the public will play a pivotal role in shaping its future. The introduction of spot Bitcoin ETFs marks a significant milestone, yet many questions and challenges lie ahead for the cryptocurrency ecosystem.

As of 3:10 a.m. Eastern Time on Sunday, Bitcoin was being traded at a valuation of $41,656.95, with a noteworthy 24-hour trading volume amounting to $10.32 billion.

The cryptocurrency has exhibited a marginal 0.19% uptick in its value over the course of 24 hours, juxtaposed with a 2.89% decline over the preceding week.

Data sourced from CoinMarketCap revealed that Bitcoin's circulating supply presently amounts to 19.6 million BTC, underpinning its substantial market capitalization, which currently stands at $817.07 billion.