The investment world seems to be holding its collective breath, waiting for the Securities and Exchange Commission to approve a bitcoin exchange-traded fund (ETF).

Whether the approval happens or not, it has helped underpin a rally in bitcoin since the waning months of 2023.

The deadline is next week for the SEC to approve or reject bitcoin ETFs, and the discussion trains a lens on the great divide in crypto-land: bitcoin as a speculative investment versus bitcoin as a legitimate payment vehicle.

The ETFs? Well, they’ll boost the speculation in part because there will be new avenues through which to speculate. As many as 14 money managers are seeking to create and launch their own “spot” bitcoin ETFs, Yahoo Finance reported Thursday (Jan. 4).

“The approvals could also expand widespread acceptance of the world’s biggest cryptocurrency, making bitcoin a potential staple in 401(k)s, IRAs and pension plans used by everyday people,” the report said.

But if there’s a sense that embracing ETFs will lead to a comfort level in using bitcoin as a means of getting commerce done, the wait may be a long one. And it may never culminate in the mainstream uptake that some proponents envision.

To be sure, and two days past the 15th anniversary of its debut, bitcoin has made at least some inroads. In recent news, bitcoin technology and financial services company River launched a feature that enables global bitcoin payments via text message. Ferrari, meanwhile, has begun accepting crypto for payments.

Still Some Inherent Issues

Back in 2018, PYMNTS CEO Karen Webster noted in a column that there are some fundamental challenges when it comes to bitcoin.

“Bitcoin exchanges are routinely hacked, and those funds are usually lost forever,” she wrote. “Bitcoin is anything but free and, in fact, it can be pretty pricey for senders and receivers.”

Bitcoin-related fees are at 20-month highs at nearly $40, Cointelegraph reported last month.

The volatility of the crypto itself bears mention. At a recent $43,000, a bitcoin is “worth” 157% more than it was a year ago. But the day-to-day swings — mid-single-digit and double-digit percentage point surges and slides are commonplace — point to the inherent problem of using bitcoin in commerce. There’s no backing to the digital holding, and there’s no surety of where a transaction “settles” as it changes hands.

The PYMNTS Intelligence report “The U.S. Crypto Consumer: Cryptocurrency Use in Online and in-Store Purchases” found that bitcoin remains the go-to name for many crypto enthusiasts, as it is used by nearly 80% of consumers who hold crypto to transact. But only 16% of overall consumers have owned cryptos. Of that 42-million-person pool, 16.1 million used crypto to transact, which implies that 6% of the population (overall) has desired to use crypto to buy things and acted on that desire.

The promised tsunami has not emerged — and one wonders when, or if, it ever will.

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