Opinions

Bitcoin (BTC) Not on the Wall Street, Thanks to ETNs Deficiency

Bitcoin has not been able to hit the Wall Street as Wall Street investors are yet to join the crypto ecosystem, this could be a result of lack of bitcoin exchange traded notes (ETNs) in the world of crypto, suggested in an interview by Mr. Ed Tilly, who is the CEO, President and Chairman at the Chicago Board Options Exchange (CBOE).

The digital currency has still not made a name for itself in the Wall Street which is believed to be so due to the fact that not enough exchange traded notes (ETNs) have yet been released for bitcoin and that is the reason why the Wall Street investors are hesitant on joining the crypto world, according to Ed Tilly. Mr. Tilly said in the interview:

The growth of Bitcoin in listed markets is still hamstrung by the lack of a trading product geared toward mom-and-pop investors.

He believes that the cryptocurrency has not been able to hit the big markets because not enough attractive tools have been provided to the investors for them to enter the crypto ecosystem. Investors need a more tradable product in order to operate in the crypto market but that is exactly what the cryptocurrency lacks at the moment.
As the interview also indicates, the digital currency needs support of exchange traded notes (ETNs) to attract the Wall Street investors, otherwise, the void will most likely be never filled.

Bitcoin tried to back this cause with the help of Bitcoin Futures, which were launched last year in December ‘to herald stability and a surge of liquidity in cryptocurrency markets’. Unfortunately, the launch of Bitcoin Futures did not prove much useful for the growth of the cryptocurrency as they too lacked notes attached to them which could be used for trading purposes for the investors.

A bit of a comparison was also done in the interview as Mr. Tilly thought that exchange traded notes (ETNs) are more in reach of the investors as compared to Bitcoin Futures since there are lesser limitations on the entry of ETNs than that of the Bitcoin Futures, hence more investors could make use of the ETNs. He further added:

The power of having that future there is also having an ETN that is more attractive to retail, and then institutions can lay that risk off on the listed futures market. […] Absent that leg and introducing trackers or notes, I think we will be in this, ‘It trades every day, but it is not the story.’

The Chairman of CBOE thinks that the issue with having a Bitcoin Future is that there is another product in the market far more suitable for investors to trade and invest in with lesser risks, which is, ETN. So, the better choice would be to introduce more exchange traded notes (ETNs) attached to bitcoin if the cryptocurrency wishes to make itself prominent in the Wall Street by attracting more investors.

As most ETF applications are still pending by the regulatory authorities, similar is the case with the Bitcoin exchange traded notes (ETNs). Mr. Tilly argues that this is so because the regulators believe that they cannot protect investors from activities in the space that could cause them damage since they are not the controllers of that market. It is a market where investors and consumers have to look out for themselves on their own by making wiser choices.

At the end of the interview, Mr. Ed Tilly said that, “You answer that question, you get your first ETN”. This means that there is still so much work to be done for regulators to approve the launch of Bitcoin ETNs as well as ETFs because the cryptocurrency is not at all ready yet in the eye of the regulatory authorities. Hence, the absence of Wall Street investors from the crypto space might stay put for some time at least.

Jaudat Sulehri

A management student, sports enthusiast and a writer. Jaudat gives his insights on the cryptocurrency in the world of trade and blockchain technology in particular. He also holds investments in XRP and BCH. Contact the editor at editor.opinions@blockpublisher.com

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