ETFs, a backronym for Exchange-Traded Funds, have lately caught up with the imagination of cryptocurrency investors. To them, mingling a non-sovereign asset like bitcoin with an institutional product such as an ETF creates a best-of-both-world scenario for an emerging cryptocurrency market. What happened a day after the April Fool’s day, to many, was a sneak preview of a big bull move.
Nevertheless, regulatory roadblocks have kept financial institutions from launching an ETF. The US Securities and Exchange Commission (SEC) expressed its concerns about the underlying spot market, which provides the basis of bitcoin price, based on which an ETF gets settled and cleared. The securities regulator borrows its worries from cases involving price manipulation in the bitcoin market, driven by the so-called whales.
VanEck, one of the firms whose Bitcoin ETF is long-pending before the SEC, announced on Tuesday that it is going to launch a so-called ETF-like product for institutions. Analysts were quick to call VanEck’s latest “limited Bitcoin ETF” a ripoff of a similar product offered by Grayscale. The New York-based firm, known for bringing about $330 million to cryptos against an otherwise bearish sentiment, offers a Bitcoin Investment Trust under the ticker of GBTC.
Bakkt, an Intercontinental Exchange-backed digital assets platform, will also launch its physically-settled daily and monthly bitcoin futures on September 23. Analysts believe it would expose bitcoin before more institutional buyers as they go looking for safe-havens against risky assets.