Bitcoin’s ETF has been one of the hottest topics in the crypto world in 2018, multiple proposals for an ETF were submitted, the most prominent of which was the one presented by the Winklevoss brothers. Although it is a tool for huge institutional investments and building trust, the SEC has been hesitant in granting the ETF to crypto. Ricky Li, Cofound and Head of North America at Altonomy believes,
ETF opens the door for mass retail adoption and also for institutional investors to enter the field.
The main issue with crypto at the moment is the absence of factors that create trust. Fraudulent and manipulative activities are being carried out in the crypto space and the services are being used negatively. For example, zk-Proofs are being used for transactions made on the dark web, furthermore, people are manipulating the consensus algorithms for carrying out activities like 51% attacks and double spending. Ricky explained his views on this stating,
The hesitation from the SEC to grant an ETF for Bitcoin is mainly driven by their concern of market manipulation and unstable custodian solutions and ultimately to protect investors’ interest.
Obviously, when these issues are once addressed, according to Ricky, new doors for investments and growth would open automatically for crypto, which would then bring huge institutional investments.
When these concerns are addressed by new technology, which will continue to take a fairly long time to evolve and mature, we will see sophisticated financial instruments come live including ETF, derivatives, etc. Those combined will officially mark the birth of cryptocurrency as a new asset class with trading volume 10X 100X more than it is now.
The service they’re [Bakkt] planning in many ways is superior to an ETF because it will allow people to spend Bitcoin as well as investing.
