Why the world needs a spot Bitcoin ETF in the US: 21Shares CEO explains
After so many attempts and delays, the US government finally approved a Bitcoin exchange-traded fund. The proposed ETF is still waiting for approval from more regulators but 21Shares CEO says it will be a game changer for the industry.
Despite the rising popularity of cryptocurrency exchange-traded funds (ETFs) throughout the globe, the global trading community continues to wonder when a spot Bitcoin (BTC) ETF would be launched in the United States.
Following years of rejection by the US Securities and Exchange Commission, some ETF experts believe a spot Bitcoin ETF might become a reality around mid-2023 (SEC). Despite the SEC’s apparent aversion to such a product, industry participants such as Grayscale continue to lobby for a spot BTC ETF.
The possibility of the SEC approving a spot Bitcoin ETF is one of the most anticipated events in the industry for a variety of reasons.
A spot Bitcoin ETF, according to 21Shares CEO Hany Rashwan, would allow institutional and ordinary investors who are now barred from the crypto market to participate.
“Investors are excluded on the institutional front owing to investment limits and legal uncertainties,” the CEO said in an interview with Cointelegraph.
“For less tech-savvy retail investors, the biggest barriers to investing directly in crypto are building a wallet and trading on unfamiliar exchanges and platforms.” “Investing in an ETF to have access to cryptocurrency would alleviate these issues,” Rashwan remarked.
He noted that the new asset class comes with its own set of dangers, but that “this is true of all goods.”
According to 21Shares CEO, one of the significant distinctions between owning cryptocurrencies and crypto ETFs is that investors may purchase and sell the ETF through a traditional bank or broker into existing investing or trading portfolios. “To hold the tokens, you don’t need to register additional accounts or wallets,” Rashwan said.
The total amount of money invested in crypto ETFs has reached $16.3 billion.
While the SEC has yet to authorize a pure Bitcoin ETF in the United States, similar investment products are becoming more popular in other nations. In February 2021, Canada launched its first-ever Bitcoin ETF, the Purpose Bitcoin ETF, becoming one of the first nations in the world to do so.
On May 12, three new spot cryptocurrency ETFs are anticipated to begin trading in Australia, including a BTC ETF from Cosmos Asset Management and BTC and Ether (ETH) ETFs from 21Shares.
Aside from pure asset-based ETFs, there is a wide range of ETFs connected to asset derivatives such as futures or contracts combining stocks of important crypto businesses.
According to figures provided by the ETF research company ETFGI, total assets invested in crypto ETFs and exchange-traded products (ETPs) reached $16.28 billion by the end of Q1.
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“We are certain that this growth will continue as additional markets open up to crypto, and Europe has been at the vanguard of crypto ETF innovation and acceptance,” the CEO of 21Shares noted.
“The primary takeaways are that an allocation to crypto is becoming an increasingly important aspect of portfolio diversification, and that they prefer to do so via ETFs for the reasons described above – ease of access, cost-efficiency, and transparency.”
Since its inaugural crypto ETP in 2018, 21Shares has released a total of 31 crypto ETPs, including listings on major stock exchanges in Frankfurt, Zurich, Paris, and Amsterdam. The business has also sought to develop a spot Bitcoin ETF in the United States, filing with the Securities and Exchange Commission in June 2021 for the ETF alongside Ark Investment Management. On March 31, the SEC formally rejected the ETF application.
The “what are etfs stocks” is a question that has been asked countless times. The answer to the question is, an exchange-traded fund (ETF). An ETF is a type of investment company that tracks the performance of a particular index, commodity, or basket of assets and trades on an exchange like any other stock.