The demand for the establishment of a crypto-linked exchange-traded fund (ETF) is very strong among the institutions. As of now, the institutional investors are holding back from entering this world of cryptos owing to lack of an intermediate fabric like a crypto-linked exchange-traded fund (ETF). The regulatory body in charge of approving a crypto ETF, the United States Securities and Exchange Commission (SEC), has not yet approved an ETF owing to the issues such as manipulation, liquidity, custody, fraudulent and illegal activities associated with the world of crypto. Since the crypto space is highly unregulated, negative and malicious activities have found various ways to seep in. So what would be more important in this space, an ETF or regulations? Here’s the breakdown of the situation.
Due to regulatory unclarity, the crypto space has been filled with a plethora of scams. Many investors have lost a large amount of money to these scams. Fraudulent and manipulation activities have marred the reputation of this space to a very large extent. Owing to these problems, the SEC is not willing to approve an exchange-traded fund (ETF) linked to cryptos as of yet. If more regulatory clarity is obtained with sanctions curbing out the negative elements associated with this space, the SEC will likely be more approving of an ETF.
The co-founder and general partner of Morgan Creek Digital, Jason Anthony Williams, also recently stated in an interview to BlockPublisher:
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.
Once regulatory clarity is there, the investors will be provided with a secure fabric to operate. Since the protection of the investors is one of the top priorities of the SEC, regulations might help pave a way for a crypto-linked ETF.
In order to get an insight into what might be more important for the crypto world, an ETF or regulatory clarity, BlockPublisher got in touch with one of the well-renowned names in the blockchain world, Thomas Power. He said:
Crypto regulation is No. 1. ETF relatively speaking while important is a sideshow to regulation.
So, regulations seem to weigh more than an ETF in terms of importance. With regulatory clarity in place, a secure layer of operation can be provided to the institutions, likely increasing the inflow of money into this space. So, moving into 2019, let’s see how things pan out.