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With the decision on the eventual launch of a cryptocurrency-based exchange-traded fund in the US still firmly with the Securities and Exchange Commission (SEC ), experts continue to speculate on the market and its potential.
Managed investment funds based on cryptocurrencies may offer a less risky investment path for interested investors, or a more familiar path for traditional institutional investors.
Although CBOE and CME Group launched bitcoin futures in December 2017, and the SEC approved seven blockchain-based ETFs up to now in 2018, bitcoin or cryptocurrency ETF is still the holy grail of the market. Some think that an exceptional application of the ETF based on bitcoin could be approved as early as next month
Difficult to value
based ETF would be a major blow to the cryptocurrency space. The SEC, however, is reluctant to raise concerns about price volatility and the difficulty of effectively fixing a market price for basic payments.
Matthew Hougan, Global Head of Research at Bitwise Asset Management, states that It is difficult to determine what are the good prices for cryptocurrencies – apart from the fund premiums –
. Crypto ecosystem has not developed an agreed framework for evaluating crypto.
Hougan believes that cryptocurrencies could become widely spread alternatives to money, such as gold, by putting a floor under prices. "It's quite possible that a new store of value can emerge in the world," said Hougan, "I do not think this concept has started and ended with gold."
Harding Gain Exposure
good. The Bitcoin Investment Trust saw an average trading price of 56% higher than the portfolio asset value according to Morningstar but it has little competition. Its performance could fall sharply if bitcoin ETFs bring a choice to the market.
"The investment challenge focused on cryptocurrency is that it is difficult to obtain exposure because there are no ETFs listed in the United States", said Todd Rosenbluth, director of the ETF and Mutual Funds Research CFRA Investment Research . "When the offer to acquire exposure to Bitcoin grows via ETF choices and responds better to demand, the premium will shrink."
Blockchain Versus Bitcoin
Experts believe that investors are better positioned to turn to blockchain technology-based investments. Joe Davis, head of Vanguard's investment strategy group, says he was "enthusiastic" about the blockchain but, for Bitcoin, there is a "decent probability that its price will be zero."
Hougan recommends caution but believes Bitcoin has potential, predicting that adding Bitcoin to a 60% equity and 40% bond portfolio could improve its performance.
Bitcoin ETFs could be one of the many market signals expected by institutional investors to truly penetrate the cryptocurrency market. feed his next boom.
Do you think that the launch of Bitcoin-based ETFs will make the difference with the price of Bitcoin? Are blockchain-based ETFs better? Let us know your thoughts in the comments below!
Images courtesy of Shutterstock, Bitcoinist Archive
The lack of Bitcoin-based ETFs challenges investment markets in cryptocurrency.
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