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The crypto market topped $2 trillion this week, a month after Bitcoin went below $30,000. Speculation rises again when the U.S. will get an ETF, 8 years after the Winklevoss twins tried to gain SECs approval. The ETF is expected to hold the first global digital asset and also track its price tag.
Towards ending of July, ProFunds took a remarkable step in the direction of the SEC-approved Bitcoin ETF. They are the asset manager and have launched the initial Bitcoin futures mutual funds. The funds are to hold only Bitcoin futures contracts, maybe Canadian money market instruments and ETFs.
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Notably, SEC chair Gary Gensler stated a week after that SEC would appreciate a Bitcoin ETF with a related strategy. This is a statement that can increase the rate of ETF application.
Major Firms To Introduce Crypto ETFs
With the increasing popularity of ETFs among institutions and retail investors, many asset managers wish to launch a cryptocurrency ETF. The crypto ETF is diversified, simplified, accessible, and cheap to gain market exposure in some aspects.
The assets are pooled, and investors can pay small amounts to the fund and spread it across the market. The key feature is that investors pay taxes on capital gains when they make sales, and liquidation is instant.
Undoubtedly, Bitcoin has gained a lot of attention due to its return on investment which has been astronomical though volatile. Additionally, with the increased inflation rates, some companies and investors now use cryptos to hedge risk.
BTC has maintained an upward momentum and seeks to climb above $50k | Source: BTCUSD on TradingView.com
Mishra, during research, revealed investors’ opinions on Bitcoin and Gold maintaining their value even when the dollar value depreciates. Neena is the ETF research director at Zacks Investment Research.
The Bitcoin ETF proposed shows the investors’ interest in accessing the product; it was later approved in February. Within two months of its trading, the ETF rolled in over 1billion Canadian dollars.
Possibilities of Bitcoin ETF
There are deliberations that the U.S. lags far behind in crypto ETF regulation, including those within the SEC ranks. However, Germany, Switzerland, Sweden, and other countries have legalized crypto ETPs (exchange-traded products). An ETP is simply an investment tool that trades on any (crypto) exchange; it must not be an ETF.
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Canada has recorded a boom in cryptocurrency funds after approving its initial crypto ETF this year. Such funds include the ETF (BTCQ), the 3iQ CoinShares, and the Evolve Bitcoin ETF (EBIT).
The CI Galaxy Bitcoin ETF (BTCX) is the ETF having the lowest available fees with 0.95% annual fees. It was launched in March and had an asset worth $254 million.
The regulators in Canada have always surpassed the U.S in approving various kinds of ETFs, Mishra stated. In addition, they are faster in approving futures-based psychedelic and marijuana investment products, she added. Lastly, Mishra notes that the U.S seems to be very conservative.
Featured image from Pixabay, and chart from TradingView.com