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Wednesday, May 12, 2021

How Will ETFs Help Bitcoin And The Cryptocurrency Market?

The newest head of the Securities and Exchange Commission is Gary Gensler. And his induction into the government might just be the best time to bring out the ETFs which would be incredibly useful to Bitcoin and other cryptocurrency markets.

This opinion would be worthwhile despite most of the institutional capital and a larger portion of the interests turning towards the sector dealing in crypto assets. Why? Because of the lack of services and traditional products that would serve as a headwind for ETFs. This implies that ETFs do have the opportunity to be the next big step in the development of other cryptocurrencies, and yet no one knows what the product really is. 

ETFs and Their Utility In Bitcoin

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An ETF is nothing but one out of several forms of investments that could be purchased and then sold across exchanges throughout the day. Apart from routinely putting in some more diversification, either through tracking another investment basket, ETFs also have commissions and fees which are much lower than usual or the amount that is not incurred when bought by investors. 

If this definition is taken as gospel, it would definitely appear that the entire cryptocurrency sector seems to be profiting from the proliferation of crypto ETFs along with Bitcoin. Yet, the only saving grace seems to be that ETFs of bitcoin is pretty illegal over America with the SEC denying quite a few applications for the product. One of the many alternatives for the product that has been attracting quite a lot of attention has been the idea of trust. 

One example of that would the Grayscale Bitcoin trust. Although quite a lot has been penned down about the assets under the management of a trust, the product does appear to be fundamentally similar to an ETF. Yet, there are quite a few differences that would definitely illustrate the need for a real crypto ETF. 

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