Despite the growing adoption of various cryptocurrency exchange-traded funds (ETFs) around the world, the global trading community continues to ask one question: When will a spot Bitcoin (BTC) ETF appear in the United States?
According to some ETF analysts, uA Bitcoin spot ETF could become a reality in mid-2023, after years of rejection by the United States Securities and Exchange Commission (SEC). Despite the apparent unwillingness of the SEC to allow such a product, industry players like Grayscale continue to actively push for a spot BTC ETF.
There are quite a few reasons why the potential approval of a Bitcoin Spot ETF by the SEC remains one of the most highly anticipated developments in the community.
21Shares CEO Hany Rashwan believes that a spot Bitcoin ETF would open up the cryptocurrency market to institutional and retail investors who are currently excluded from participating in the digital asset space.
“On the institutional front, investors are locked out due to investment restrictions and regulatory uncertainty,” the CEO told Cointelegraph in an interview.
“For retail investors who are less tech-savvy, the main hurdles to investing directly in crypto include setting up a wallet and trading on exchanges and platforms they are unfamiliar with. Accessing cryptocurrencies by investing in an ETF would solve these problems,” Rashwan said.
He noted that the new asset class is associated with certain risks, but “this is exactly the same for other products.”
One of the main differences between holding cryptocurrencies and cryptocurrency ETFs is that investors can buy and sell the ETF through a bank or regular broker in existing investment or trading portfolios, according to the CEO of 21Shares. “There is no need to create new accounts or wallets to hold the tokens,” Rashwan noted.
Total assets invested in cryptocurrency ETFs reach $16.3 billion
Although the US SEC has not yet approved any pure Bitcoin ETFs, these types of investment products have been gaining popularity in other countries. Canada debuted its first Bitcoin ETF, the Purpose Bitcoin ETF, in February 2021, becoming one of the first countries in the world to adopt a pure BTC ETF.
The 12th of May, Australia is expected to start trading three new cryptocurrency spot ETFs, including a BTC ETF from Cosmos Asset Management, as well as BTC and Ether ETFs (ETH) from 21Shares.
Aside from pure asset-based ETFs, there are also a wide variety of ETFs linked to asset derivatives such as futures or contracts that combine shares of major companies in the crypto industry.
Cryptocurrency ETFs have been growing in popularity, with total assets invested in cryptocurrency ETFs and exchange-traded products (ETPs) reaching $16.28 billion at the end of the first quarter, according to data compiled by ETF research firm ETFGI.
“We strongly believe that this growth will continue as more markets open up to cryptocurrencies, and Europe has been at the forefront of cryptocurrency ETF innovation and adoption,” said the CEO of 21Shares, adding:
“The main lessons learned are that more and more investors consider an allocation in cryptocurrencies as an integral part of portfolio diversification and prefer to do so with ETFs for the reasons mentioned above: ease of access, profitability and transparency.”
Since debuting one of its first cryptocurrency ETPs in 2018, 21Shares has launched a total of 31 cryptocurrency ETPs so far, with listings spanning major stock exchanges in Frankfurt, Zurich, Paris, and Amsterdam. The company also attempted to launch a spot Bitcoin ETF in the United States, filing with the SEC for the ETF with Ark Investment Management in June 2021. The SEC officially disapproved the ETF application on March 31.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.