It is undeniable that the crypto market caught the attention of investors looking for quick profits especially last year. However, there were also a number of negative things that can be said about digital assets. For instance, it can be used by criminals, not to mention its Wild West nature is prone to price manipulation among many other concerns.
2018 is the complete opposite of what 2017 was for the crypto market. We’ve seen Bitcoin lost more than 70% of its all-time high value. In 2017, Bitcoin was able to hit near $20,000 despite starting at around $1,000 during the start of the year. Given the proliferation of scams and even the possibility of cryptos being used by money launderers, regulators have no other option but to step in.
Unfortunately, regulators are still not having a unified approach on cryptos. Many believe that regulatory clarity is a necessity in order to get institutional investors involved to inject the much-needed capital that can revitalize the struggling industry.
In fact, The US Securities and Exchange Commission hasn’t approved a Bitcoin ETF yet. However, A Bitcoin ETF $HODL is now offered by Amun Crypto on Switzerland’s crypto exchanges beginning next week. The ETF’s earnings will then be linked to five different cryptos.
Amun Crypto is a UK-based fintech company. And though all eyes are glued in the US regarding the possibility of a Bitcoin ETF, the Swiss regulators were the first to approve a crypto-related ETF. The Bitcoin ETF is designed to track an index based on the movements of the five different cryptocurrencies.
Now, 48% of the ETF’s assets are going to be invested in Bitcoin, 30% on XRP while the rest goes to Ethereum, Litecoin, and Bitcoin Cash.
What to Expect?
So what can be expected from the ETF? Matt Flood who works as a writer for Financial Times mentioned that the ETF was made in close accordance to the expected standards of a traditional exchange-traded fund. For Hany Rashwan who is one of Amun’s top executive, the aim of the ETF is that “The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies. It will also provide access for retail investors that currently have no access to crypto exchanges due to local regulatory impediments”.
There are also two leading competition for Amun. You have CoinShares and Greyscale that are offering digital currency investment vehicles but none are ETFs.
Is the US Going to Follow?
Now, is the US going to follow Switzerland? The US SEC has rejected a number of Bitcoin ETF applications citing the possibility of exposing investors to “fraudulent and manipulative acts and practices”. Could this change their mind? And also, is it going to be possible for the Solid X and VanEck led Bitcoin ETF to become a reality in the coming months?
If this happens, this is something that is needed badly by the crypto market. Bitcoin dropped to its lowest level for the year after the Bitcoin Cash hard fork a couple of days ago.