Towards the end of July, ProFunds took a remarkable step towards the SEC-approved Bitcoin ETF. They are the asset manager and launched the first Bitcoin term mutual funds. The funds should only hold Bitcoin futures, possibly Canadian money market instruments and ETFs.
Related reading | Wells Fargo and JPMorgan Seek To Introduce Bitcoin Funds
Notably, SEC Chairman Gary Gensler said a week after that the SEC would appreciate a Bitcoin ETF with a related strategy. This is a statement that may increase the ETF application rate.
Big companies to introduce crypto ETFs
With the growing popularity of ETFs among institutions and retail investors, there are many asset managers looking to launch a cryptocurrency ETF. The crypto ETF is diverse, simplified, accessible, and inexpensive to gain market exposure in some aspects.
Assets are pooled and investors can contribute small amounts to the fund and distribute them in the market. The key feature is that investors pay capital gains taxes when they make sales, and liquidation is instantaneous.
Without a doubt, Bitcoin has attracted a lot of attention due to its return on investment which has been astronomical although volatile. Additionally, with rising inflation rates, some companies and investors are now using cryptos to hedge risk.
BTC has maintained an upward momentum and seeks to climb above $50k | Source: BTCUSD on TradingView.com
Mishra, during the research, revealed investor opinions on maintaining the value of Bitcoin and gold even when the value of the dollar depreciates. Neena is the Director of ETF Research at Zacks Investment Research.
The proposed Bitcoin ETF shows the interest of investors in accessing the product; it was then approved in February. Less than two months after trading, the ETF has generated over C $ 1 billion.
Possibilities of Bitcoin ETF
There are deliberations that the United States is lagging far behind in regulating crypto and Bitcoin ETFs, including those from the ranks of the SEC. 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 exchange (crypto); it does not have to be an ETF.
Related reading | Ethereum Founder Says Decentralized Token-Based Governance Prevents DeFi Industry Growth
Canada saw a boom in cryptocurrency funds after approving its first crypto ETF this year. These funds include the ETF (BTCQ), 3iQ CoinShares, and the Evolve Bitcoin ETF (EBIT).
The CI Galaxy Bitcoin ETF (BTCX) is the lowest fee ETF available with an annual fee of 0.95%. It launched in March and had assets worth $ 254 million.
Regulators in Canada have always surpassed the United States in approving various types of ETFs, Mishra said. In addition, they approve psychedelic and marijuana investment products more quickly in the long term, she added. Finally, Mishra notes that the United States appears to be very conservative.
Featured image from Pixabay, and chart from TradingView.com