This news, combined with the SEC’s recent approval of Volt Equity’s exchange traded fund , which is composed of stocks with significant exposure to bitcoin, represents the latest in the march toward an ETF holding “physical” bitcoin.
The time has come for the SEC to approve a true crypto ETF.
But times have changed, and bitcoin markets have matured.
Bitcoin is the best performing asset over one-, three-, five- and 10-year periods compared to other assets widely available to investors.
Half-measures limit benefitsWe have reached a stage in the development of crypto markets where investors deserve to be able to hold bitcoin in a wrapper that represents the true price of the underlying asset if they don’t wish to hold that bitcoin directly.
Closed-end funds, as well as a bitcoin futures ETF, represent the only near-term options for investors looking to invest in crypto through an ETF structure.
In these cases, the product does not have the creation and redemption mechanism of proven ETF vehicles, which keeps the price of the fund consistent with the value of the underlying assets.
It’s a problem with the structure of the fund, something that has been known in the markets for many years, with ETFs being a proven fix to the discount and premium issues that have plagued closed-end funds for years.
Bitcoin futures ETFWhile the availability of a bitcoin futures ETF is a positive development, futures are complicated derivatives products, which is why many investors who don’t meet certain thresholds are generally prohibited from trading them.
ETF issuers are given the same opportunity afforded to some of their international counterparts to provide a safe, reliable, transparent and cost-efficient bitcoin-based alternative, all under the oversight of the SEC, to the structured products currently in the market.