The recent wave of Bitcoin exchange-traded fund (ETF) applications has led Circle co-founder and CEO Jeremy Allaire to anticipate eventual regulatory approvals. In an interview with Bloomberg, Allaire stated that the concerns previously raised by financial watchdogs are being addressed, which in turn creates a more mature market environment to support ETFs. He highlighted the presence of regulated custody infrastructure and efficient market surveillance as contributing factors.
An ETF is an investment fund that trades on a stock exchange, allowing investors to gain exposure to a specific asset or group of assets. In the case of a Bitcoin ETF, it would enable investors to trade shares representing ownership of Bitcoin without directly holding the cryptocurrency itself. Bitcoin ETFs have already gained traction in several global markets, including Canada, Brazil, and Dubai, but the U.S. Securities and Exchange Commission (SEC) remains hesitant in providing approval.
The SEC’s hesitance stems from its concerns about protecting investors and possible fraudulent or manipulative practices. Yet, Allaire maintains that “digital stores of value like Bitcoin remain a hedge instrument in the context of continued persistent inflation and weakening currencies.” This implies that Bitcoin ETFs are more likely to be approved for general investor access as the issues raised by the SEC are overcome.
In recent weeks, the SEC has received a new wave of applications for Bitcoin ETFs, initiated by Wall Street giant BlackRock on June 15. Following BlackRock, other companies such as WisdomTree, Invesco, Galaxy Digital, and Valkyrie Investments have also filed applications to launch their respective Bitcoin ETFs. This suggests that institutional interest in cryptocurrency-based investment products is growing.
Indeed, a recent report released by digital asset management firm CoinShares supports this notion. The report states that the total assets under management in cryptocurrency investment products reached a yearly high, surpassing an outstanding $37 billion. ProShares’ own Bitcoin Strategy ETF (BITO), which tracks Bitcoin’s price by strategically investing in CME Bitcoin Futures, witnessed the largest inflows in the U.S. at $60.4 million, taking the total assets under management beyond the $1 billion mark.
While the crypto community remains hopeful for the approval of Bitcoin ETFs in the U.S., it is evident that regulatory hurdles still need to be overcome. With financial watchdogs addressing their concerns, the future of Bitcoin ETFs in the U.S. could be more promising, opening up new opportunities for investors and strengthening the cryptocurrency landscape. Nevertheless, the ongoing uncertainty and skepticism surrounding regulatory approvals underscore the need for caution and preparedness among potential investors.
Source: Decrypt
