Asset manager Kryptoin Investment Advisors filed an initial registration statement with the United States Securities and Exchanges Commission for a bitcoin ETF.
The stocks of this ETF would be traded on NYSE Arca according to the filing document posted bt the SEC. Unlike the NYSE that specializes in large-cap stocks, NYSE Arca lists Exchange-traded products and equities trade. This contains ETFs, Exchange-traded notes (ETNs) and Exchange-traded vehicles (ETVs).
The trust ensures that they will hold Bitcoins to ensure that the shares’ price reflects the price of an actual bitcoin. They also stated that they would not be selling or buying bitcoins directly but they will acquire them through shares called baskets. They stated:
Instead, when it sells or redeems its Shares, it will do so in ‘in-kind’ transactions in blocks of 100,000 Shares called ‘Baskets’ at the Trust’s net asset value (‘NAV’). Only Authorized Purchasers may purchase or redeem Shares with the Trust, and they will do so by delivering bitcoin to the Trust in exchange for Shares when they purchase Shares.
Kryptoin’s head of ETPs Jason Toussaint compared bitcoin as an asset class to gold. He stated that SEC was skeptical when the Gold Council brought SPDR Gold Shares to the market. He further said:
There was also a lot of learning the SEC had to go through to fully understand and gain a level of comfort with the underlined gold market.
Before this proposal, there have been 3 unsuccessful ETF proposals in total. The crypto community has always been of the view that ETFs might bring mass adoption to crypto. But recently, with the advent of bug crypto projects like Facebook’s Libra and Telegram’s TON, the focus of people has escaped from ETFs and landed on regulations.
The Congress, SEC, FinCEN and other regulatory authorities are looking for ways to regulate cryptocurrencies so that the inevitable crypto boom can take place. They, however, are still skeptical regarding subjects of money laundering, disruption of traditional financial markets, terror financing and illicit activities. Once the crypto space moves past these remarks, the regulations would help the adoption of crypto on government levels.
CEO of the crypto investment firm BKCM and CNBC’s analyst Brian Kelly was also of the view that ETFs might not be the requirement of the hour, instead, we should look for regulations. He was also positive about the regulations as the authorities have shown a lot of motion regarding this subject lately. He stated in an interview:
You have companies like Fidelity and TD Ameritrade starting to push into this space. So ultimately you’re going to be able to buy Bitcoin in a regular brokerage account, or it’s going to look like a regular brokerage account. So I’m less concerned that you need a bitcoin ETF at this point in time.