The United States Securities and Exchange Commission (SEC) recently held off from passing any verdict regarding the bitcoin exchange traded-fund (ETF) proposal presented forward by the VanEck/SolidX trust. Up till now, the SEC has not yet approved a single crypto-linked ETF proposal. But are we going to see it happen this year? As suggested by many experts of the game, this situation seems highly unlikely.
Talking to BlockPublisher regarding the approval of a crypto-linked ETF this year and its effects on the market as a whole, the founder and partner at Morgan Creek Digital Assets and a well-renowned personality of the crypto world, Anthony Pompliano stated:
In my opinion, it is unlikely that the ETF gets approved in 2018. When it is approved, the financial product will (1) increase the stability and safety of the asset, while (2) increasing access to the asset for a reasonable amount of people. With that said, I am less confident in a major price movement because of an ETF approval. Time will tell.
Besides the unlikeliness of a crypto-linked ETF getting approved this year, Anthony pointed out two of the major consequences that are likely to occur as a result of the establishment of a crypto-linked exchange traded-fund.
Firstly, an ETF will help make the digital asset more stable and safe. Volatility is one of the major reason why investors hold back from entering this market. Once an ETF gets established and a safety fabric is provided, more and more institutional investment will pour in this market making it more stable.
Secondly, an ETF will help ensure that the asset is within the reach of the general public. With such an official framework in place, acceptance among the people and investors is more likely to increase. An ETF’s major purpose is to provide access to commodities that are otherwise difficult to access. Getting access to an asset without actually buying it makes it easier for the investors and the people to enter the game and invest in it, specially if it is as volatile, manipulated and unstable as crypto. Regarding the price movements as a result of an ETF approval, the former product manager at Facebook didn’t seem much confident. It is likely that the asset will see a price boost as a result of an ETF, but how much, only time will tell.
With more and more developments being made in the crypto world, it remains to be seen how things pan out for the digital assets and as suggested by Anthony, the establishment of a crypto-linked exchange traded-fund will most likely prove to be beneficial for the crypto market as a whole.