2019 seems likely to be the year in which we are going to witness a lot of developments in the crypto world. The eyes of the financial world are currently focused on two things regarding cryptos; an exchange-traded fund (ETF) and regulatory clarity. But which one of these is more important?
In order to get an insight into this aspect, BlockPublisher got in touch with the member of Forbes Finance Council, David Gokhshtein. Talking about whether a crypto ETF will be more important or crypto regulation, David said:
It all depends. We’d want crypto regulation so institutional investors feel safe, as well as regular investors. ETF is just going to give us a short term boost.
One of the major reasons why the institutions and the general investors are holding back from stepping into the world of cryptos is regulatory unclarity. This nascent world of cryptos is rife with scams and illegal activities right now owing to the lack of regulations and checks. An exchange-traded fund (ETF) has also not been approved by the regulatory in charge, the United States Securities and Exchange Commission (SEC), owing to the issues like manipulation, liquidity, custody, risks associated with this space etc. Regulatory unclarity is one of the reasons why so many illegal activities are carried out in this space.
More than an ETF, concrete regulatory frameworks are more desired in this space by major institutions. Institutions demand a secure and trusted fabric of operation which can only be formed if proper regulations are there in this space. The Wild West ride of the crypto should come to an end.
The co-founder and general partner at Morgan Creek Digital, Jason Anthony Williams, also recently suggested that regulatory clarity is more important than a crypto ETF.
I don’t think ETF is as big as regulatory clarity. And they probably happen around the same time because I think part of the ETF issue is the regulatory clarity.
Although an ETF will likely help increase the participation from institutions up to a certain level, a general layer of trust regarding this space cannot be developed among the general public, organizations, and institutions until proper regulations are made to curb out the negative aspects linked with it.