Despite growing adoption of cryptocurrency exchange-traded funds, (ETFs), the global trading community still asks one question: When will a spot Bitcoin ETF (BTC) go live in the United States?
ETF analysts believe that a spot Bitcoin ETF could be realized in the middle of 2023 after years of rejections by the U.S Securities and Exchange Commission (SEC). Grayscale, an industry player, continues to push for a spot BTC exchange traded fund despite the apparent refusal of the SEC to allow it.
A number of factors make it one of the most anticipated events within the community, including the possibility of an approval by the SEC of a spot Bitcoin ETF.
Hany Rashwan, CEO of 21Shares, believes that a spot Bitcoin ETF will open up the cryptocurrency market to institutional investors and retail investors who are currently exempt from the digital asset space.
In an interview with Cointelegraph, the CEO stated that investors are exempted from institutional investment due to restrictions on investment and uncertainty.
“Retail investors are less tech-savvy and face major hurdles when investing in crypto. They need to create a wallet and trade on platforms and exchanges they are unfamiliar with. Rashwan stated that these problems could be solved by accessing crypto through an ETF.
He noted that while the new asset class has certain risks, it is not as risky as other products.
According to 21Shares CEO, one of the main differences between crypto ETFs and cryptocurrencies is that investors can purchase and sell ETFs via a regular bank or broker into existing trading or investment portfolios. Rashwan said that you don’t have to open new wallets or accounts to hold the tokens.
The total assets in crypto ETFs reached $16.3 billion
Although no pure Bitcoin ETF has been approved by the U.S. SEC, these products are becoming more popular in other countries. Canada launched its first ever Bitcoin ETF in February 2021 with the Purpose Bitcoin ETF. This made Canada one of the first countries to adopt a spot BTC ETF.
Australia will begin trading three new spot cryptocurrency ETFs on May 12th, including a BTC ETF by Cosmos Asset Management and BTC (ETH) ETFs starting at 21Shares.
There are many ETFs that are asset-based, but also those linked to derivatives such as futures or contracts that combine stocks from major crypto companies.
According to ETFGI data, crypto ETFs are becoming more popular. The total assets in ETPs and ETFs reached $16.28 billion at the end of Q1, with ETPs representing approximately 80% of all ETF assets.
Related: Valkyrie’s Bitcoin futures ETF approved by the SEC
21Shares CEO, David Smith, stated that “We believe this growth will continue as more crypto markets open up and Europe has been at forefront of crypto ETF innovation. Adoption is also expected to increase.”
“The main lesson learned is that investors are increasingly considering crypto allocations as part of portfolio diversification. They also prefer ETFs over crypto for the above reasons: ease of access, cost efficiency and transparency.
21Shares launched its first crypto ETP in 2018 and has since listed 31 more. Listings include major stock exchanges such as Paris, Zurich, Paris, Amsterdam, and Frankfurt. In June 2021, Ark Investment Management filed with the SEC to establish a spot Bitcoin ETF. On March 31, the SEC disapproved the application.
Eileen Wilson –Technology and Energy