BitcoinBusiness & Finance

“The Effects and Monetary Inflow Through ETF Likely Will not be as Profound as Some Would Expect” – Gordon Chen

A lot of opinions related to the BTC ETF are being circulated around in the crypto space. Most analysts have predicted that 2019 will be the year for ETF approval, but most of the general public fails to understand the effects of the ETF on crypto.  Diving deeper into the effects, Gordon Chen, founder of the blockchain project, Neutral, stated his opinion talking to BlockPublisher,

An SEC approved Bitcoin ETF would be a notable landmark for crypto, but the effects and monetary inflow likely will not be as profound as some would expect.

The general perception of the investors and the people of crypto space relating to the ETF is that with the approval, the valuations and trading volumes of Bitcoin would reach sky high due to huge institutional investments flowing in. The statement might be partially true, but even with the approval of an ETF, there still might be ambiguities for the investors. Factually, there are also other mediums that could help institutional investors to dive into the crypto space, like Bakkt. Gordon explained further stating,

Bitcoin itself is permissionless and recently has been becoming more easy to acquire. In addition, institutions can already get exposure to Bitcoin via CME/CBOE futures. However, the margin requirement for these futures instruments is upwards to 40%, reflecting the volatile sentiment of Bitcoin from the traditional financial industry. Thus it’s likely that institutional money isn’t going to be rushing into the ETF once gets approved, but just act would serve as another method for one to gain exposure to Bitcoin. The hesitation doesn’t stop there since the actual backing or pricing of the ETF also lends itself to more questions and concerns, and likely there is no gold standard.

Also explaining the factors that could really effect crypto’s growth and adoption, he stated,

What matters more for acceptance and adoption is to be aware of progress within the crypto industry along with contributing to where one sees most fruitful.

On the topic of the ETF, the analysts and experts are clearly divided by their opinions. A major portion believes that ETF is the answer to the bear market at the moment, while others believe that other factors like partnerships, custody services, the definition of use cases, scalability and other technical aspects might effect crypto positively more in the long run. Conclusively, if there is even the slightest chance of crypto’s growth which is triggered by the ETF, it is highly hoped that it gets approved soon.

Shehryar Hasan

Performing artist, guitarist and sub-editor at BlockPublisher. Shehryar is an electrical engineer and blockchain enthusiast. He holds investments in bitcoin, ethereum, OST, TRX and Ripple. Email: shehryar@blockpublisher.com or contact the editor at editor.news@blockpublisher.com

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