Bitcoin spot ETF demand
There are speculations that a physical exchange-traded fund (ETF) for the crypto asset (virtual currency) Bitcoin, which is currently undergoing listing review in the United States, may attract interest from the country’s pension funds.
According to a report on CNBC on the 22nd, Steven T. Larsen, a financial planner and founder of the U.S. financial advisory firm Columbia Advisory Partners, said, “If the U.S. Securities and Exchange Commission (SEC) approves, we will “There is a possibility that companies will be able to invest in Bitcoin spot ETFs with their corporate defined contribution plans (401k).”
What is 401k?
A type of corporate pension that you can voluntarily join in addition to your public pension. A pension system in which contributions are made every month and employees (participants) manage their pension assets themselves, and the amount of pension benefits is determined based on the investment results. There is also a preferential tax system.
▶️Virtual currency glossary
The U.S. Department of Labor does not prohibit corporate pension plans from investing in cryptocurrencies, but it is urging caution in March 2022. He expressed concern about virtual currencies and related products, citing multiple risks, including large price fluctuations, the fact that regulations are still being developed, and the difficulty of holding them.
connection: US Fidelity allows retirement accounts (defined contribution pension plans) to invest in Bitcoin
Regarding the difficulty of owning it, he explains, “If you forget or lose your password, you will lose your assets. There is also the risk of hacking and theft.”
This time, CNBC listed the opinions of multiple experts, who pointed out that Bitcoin spot ETFs may be able to alleviate these concerns of the Department of Labor. In an ETF, investors do not own Bitcoin themselves.
On the other hand, there was also the view that hiring for 401k funds would not begin unless employees who want to invest in Bitcoin spot ETFs take action, rather than corporate human resources departments or trustees.
Learn about Bitcoin ETFs from the beginning: Explaining the advantages and disadvantages of investing and how to buy US stocks
The SEC has so far disapproved all physical cryptocurrency ETFs, citing concerns about investor protection. Meanwhile, companies currently filing have put mechanisms in place to alleviate SEC concerns.
The fact that BlackRock, the largest asset management company, has also applied, and that the applicant company is meeting with the SEC and amending its application form suggests that it may be approved this time. Expectations are rising.
Many also believe that multiple ETFs will be approved at the same time to ensure fairness. Many are saying that there is a high possibility that a Bitcoin spot ETF will be created in the United States in January 2024, as the deadline for making a final decision on whether to approve or disapprove the ARK ETF is due on the 10th of next month.