The hype around a bitcoin exchange-traded fund (ETF) is around for quite some time now. It is suggested by some experts in the crypto game that once a crypto-tied ETF gets established, it will help boost the market capitalization of cryptocurrencies overall as more and more institutional money will flow into this space. The Founder and Chief Executive Officer of Aximetria, Alexey Ermakov does not seem to think so.
Aximetria is essentially a hybrid banking app for storing traditional currencies and cryptocurrencies. Talking about a bitcoin ETF’s effect on the market if it gets approved, Alexey said:
The ETF is a great tool for institutional clients, which allows you to use crypto-actives for trading, but does not provide those benefits that are incorporated in the cryptocurrency. The ETF won’t raise the market caps since it is a derivative and that is a separate market.
Further elaborating on the topic, he said:
When describing a market situation, many people like to characterize the situation with two extreme provisions. On the contrary, I wanted to note that we [in Aximetria] do not see either a rush or a panic – we see a constant interest in buying and storing crypto-postives. This interest comes from new users, or those who first got acquainted with crypto assets, or who did not have the opportunity to buy them earlier, because of their high prices, now the conditions for mass adoption seem to us very suitable. Those customers who entered at the peak of value – as we are – unfortunately, it’s good that in the case of crypto assets, it’s not so difficult and you can change your strategy at any time, which you don’t do with long-term deposits in banks.
There are some problems innate to the world cryptocurrencies. Before these problems are solved, it seems unlikely that the world of crypto will gain more mainstream adoption from the institutions and the general public. Volatility, manipulation, illegal activities and scams are some of the major issues associated with this world.
Regarding an ETF, it seems that it will form its own separate niche and might not essentially help solve the innate issues associated with cryptos. A crypto-linked ETF has not been approved by the regulatory body in charge, the United States Securities and Exchange Commission (SEC), owing to the innate issues of the crypto world. The need of the hour is to solve issues like manipulation, liquidity etc. so that the crypto world gets more mature. More than an ETF, attention should be given to the development of the blockchain and crypto world overall. This will likely help the crypto world more in gaining global acceptance and growth.
SEE ALSO: Does A Crypto ETF Even Matter that Much?
Edited On 7:20 PM PKT 2/4/2019 for fact correction.