Google searches show investors are "crazy" about Bitcoin ETFs, but some say "Mt. Gox" could return

On March 11, the U.S. Securities and Exchange Commission (SEC) will make a final decision on the first Bitcoin ETF. There is speculation that the approval of the Bitcoin ETF will enable the American middle class to use Bitcoin on mainstream trading and investment platforms.

If the Bitcoin ETF submitted by the Winklevoss brothers is approved, it means that mainstream investment platforms can offer Bitcoin in the form of a stock regulated by the United States. A Bitcoin fan wrote on Reddit:

“This will send the price of Bitcoin to Mars.”

The potential approval of a Bitcoin ETF may indeed be what has driven Bitcoin’s gains in recent months. But not everyone thinks the ETF will be approved.

Billion-dollar hedge funds that insist on buying products on major exchanges will be eligible to buy Bitcoin

The SEC will decide whether to approve the Bitcoin ETF on March 11. The application for the Bitcoin exchange-traded fund was originally submitted in 2013, when the price of the currency was also at an all-time high.

According to Google search index, people's excitement about this Bitcoin ETF can now be described as "frenzy."

This Bitcoin ETF is modeled after the SPDR Gold Trust ETF, which buys and holds physical gold to buy back shares. For this Bitcoin ETF, each ETF represents one-hundredth of 1BTC, and the Bitcoin Trust plans to issue 10 million shares at $10 per share. Many predict that this will lead to a rise in the price of Bitcoin.

One Reddit user commented:

“This Bitcoin ETF will centralize a large portion of Bitcoin capital and have someone hold your private keys for you, which will make Bitcoin vulnerable to a variety of attacks that would not exist if Bitcoin was used the way it was originally intended—without a third party.”

Another added:

“ETFs are really just hype and do nothing but lead to higher fees.”

The Winklevoss brothers recently submitted a new Bitcoin ETF application to the SEC

The new filing has led to speculation that the ETF’s chances of approval have increased. In addition, the new filing adds a so-called “hard fork” clause.

The new application document states:

“When a developer or development group proposes a change to the Bitcoin network, even if it is not accepted by the vast majority of miners and users, a considerable number of miners and users still accept the change proposal, which may lead to the emergence of two or more competing and incompatible blockchain implementations. This is called a “hard fork.” In this case, the hard fork of the blockchain may be greatly detrimental to the price of Bitcoin, and thus affect the value of Bitcoin in the ETF.”

A hard fork represents a reconfiguration of the Bitcoin protocol’s provisions. If not everyone adopts the new implementation, Bitcoin could split in two, just as the Ethereum blockchain split into the original Ethereum chain and the Ethereum fork chain.

If the Bitcoin blockchain does split, the Bitcoin ETF will choose to support "the blockchain with the highest cumulative computational difficulty within 48 hours after the fork occurs."

In another case:

“If the fund’s custodian, after consulting with the sponsor, cannot determine which Bitcoin network will have a higher cumulative computational difficulty after 48 hours, then the custodian will support the Bitcoin network with better reputation, that is, the Bitcoin network that is likely to have more user and miner support.”

In short, the Bitcoin ETF follows the chain with the most computing power by default, but reserves the right to decide.

The new filing also addresses China’s recent actions against the bitcoin industry.

“In January 2017, the People’s Bank of China announced that after conducting on-site inspections of two major bitcoin exchanges, it had found a number of violations, including margin trading and failure to disclose anti-money laundering controls. In response to the Chinese regulator’s inspection, three major Chinese bitcoin exchanges—OKcoin, Huobi, and BTC China—began charging transaction fees to discourage speculative trading and prevent price volatility, a move that led to a sharp drop in trading volumes at these exchanges.”

If a Bitcoin ETF is approved, Bitcoin could be compromised by a security breach like Mt. Gox again

Bitcoin’s links to darknet markets could work against the approval of a Bitcoin ETF — or at least undermine its appeal to middle-class American investors. To ease regulatory concerns, SolidX has proposed a project to prevent thieves from stealing Bitcoin, including Bitcoin-backed products.

As March 11th gets closer, the price of Bitcoin has once again surpassed that of gold, and the driving factor is not unrelated to this Bitcoin ETF.