Bitcoin ETF To Get Approval By Default?
Vaneck BTC ETF could Get Approval By default
Vaneck Bitcoin ETF could blindly get approval as the US Securities & Exchange Commission (SEC) is set to decide on the fate of the Bitcoin ETF next month (February 27, 2019).
The world is waiting with bated breath as Bitcoin (BTC) Exchange-traded funds (ETFs) could be approved in the next month even as the US Government shutdown continues.
ETFs have listed investment products used to track the performance of bonds, shares, and/or commodities. It can also track a single commodity such as precious metals like gold. ETFs, give investors an opportunity to buy units that track indices easily.
For example, an oil ETF allows one to invest in the value of oil without necessarily having to own any oil or find somewhere to store it.
According to Cryptocurrency developers, the ETF is designed to give investors exposure to its market. The common product at present is the bitcoin ETFs, tracking the price of one or more digital coins or tokens. It also provides exposure to its price movements without significant risks and drawbacks associated with owning the actual digital currency.
Crypto ETF can track the price of digital currency by buying and storing it then allocate ownership shares between stakeholders. An alternative model is ETF to own bitcoin futures.
Cryptocurrency ETFs has been with us of late but not without a fair share of controversy. As covered by media houses over the previous two years, multiple ETF providers have put efforts to get US Securities and Exchange Commission (SEC) to approve proposals for a crypto-based ETF.
As of December 31, 2018, SEC was yet to approve cryptocurrency ETFs. The SEC has however cited security concerns. In the past, SEC has rejected crypto ETF proposals and shut down such applications from the Winklevoss twins.
Additionally, the SEC declined nine applications for bitcoin ETFs because their proposals failed to meet legal requirements. SEC underlined in their ruling that the requirement that NSE rules be formulated to prevent fraudulent and manipulative acts and practices.
The SEC is yet to rule on one more crypto application by VanEck and Fintech company SolidX that was due on December 29, 2018.
The commission has no power to extend the 240-day deadline to make their ruling. By law, if the SEC fails to decide by February 27, 2019 deadline, the ETF will be automatically approved.
CRYPTO ETFs APPROVAL
Should crypto ETFs receive approval from the SEC, the consent would be a million-dollar victory for the cryptocurrency world. With proper regulation and professionalism in its management, ETFs could represent a safer option for investors whose concerns are the risks of buying digital currency.
Besides, the legalized ETFs would bridge the gap between crypto exchanges and traditional investment tools.
WHY CRYPTOCURRENCY ETFs?
Every investment comes with risks and benefits
As an investor, it is important for you to weigh the benefits against the risks involved before making your investment in any crypto ETF.
Crypto ETFs make it easy to learn on digital currencies without having to own any.
The ETFs allow you to track multiple digital coins and tokens at once and protects you against hacking and theft besides attracting lower fees than traditional managed funds.