Cryptocurrency Markets Hoping To Get Boost From Bitcoin-Based ETF
The financial markets in the United States have seen futures and exchange-traded funds (ETFs) focused on bitcoin and the blockchain but the holy grail for cryptocurrency investors is to have a true bitcoin-based ETF.
The closest right now is the bitcoin-based futures being offered by the CBOE and CME Group that was first offered back in 2017. Some experts believe that a bitcoin-based ETF will soon happen, even as early as August this year.
Having a bitcoin-based ETF will open up the market considerably more while giving traditional investors a chance to get onto the bitcoin bandwagon. However, the Securities and Exchange Commission (SEC) is very wary of the volatility that surrounds bitcoin and is concerned about how difficult it is to pay out at a market price.
Many experts agree that figuring out the market price of a bitcoin-based ETF would be very difficult. This is because right now, cryptocurrencies are very volatile and there is no solid system in place to point out the true value of a crypto token.
Despite these difficulties in getting a dedicated bitcoin-based ETF, one ETF that focuses on bitcoin and cryptocurrencies is doing pretty well. The Bitcoin Investment Trust is performing 56 percent above its listed price, a sign that it is doing well. It is performing well mainly because it is the main choice in the market. If a new bitcoin ETF comes into play, it could be impacted negatively.
In a statement, Todd Rosenbluth, director of ETF and mutual fund research at CFRA Investment Research, said
The challenge with cryptocurrency-oriented investing is it's hard to gain exposure, as there are no U.S listed ETFs. When the supply to gain exposure to Bitcoin grows via ETF choices and better meets demand, the premium will narrow.
ETFs Must Focus On Blockchain And Not Bitcoin
However, many crypto analysts are state that it would be a mistake to focus just on bitcoin. They are of the opinion that blockchain ETF choices would be a lot better than just working for a single cryptocurrency. The real money according to these crypto experts is in the blockchain technology that underpins bitcoin.
Blockchain technology has been accepted by major financial firms as it is a lot safe and dependable than bitcoin. However, it appears that there will be a bitcoin based ETF launching very soon according to bitcoin supporters.
Petar has spent the last few years following rise of cyptocurrencies, lending insights to the potential icos coming to market as well as how current currencies are operating. Petar background is in the finance sector and is a banker by trader so money is always on the mind.