An ETF, or exchange traded fund, is a financial tool used to track the performance of traditional assets: here we list the best options for Bitcoin and cryptocurrencies ETFs currently on the market
Investment firms have started offering ETF products for Bitcoin. The world’s leading cryptocurrency has really earned its status as “something that is here to stay” and has so far proved that its critics are wrong on the issue of its longevity. The U.S. SEC has shown some hostility towards Bitcoin in the past, having rejected several Bitcoin ETFs since 2017, and it is unlikely to approve a Bitcoin ETF, at least until the cryptocurrency proves that it pleases the committee.
As Bitcoin and cryptocurrencies increasingly appear on the radar of investors with a background traditional trading, products like ETFs will encourage them to invest in cryptocurrencies without having to compete with wallets, withdrawals, deposits and the volatility of cryptocurrency markets.
However, concerns about price manipulation of digital assets have prevented the emergence of a fully regulated product until now.
Here we list the top 3 Bitcoin ETFS of 2020 that we believe will prove their worth in 2021.
Bermuda Stock Exchange ETF
The world’s first Bitcoin ETF product was launched in Bermuda. After the U.S. SEC repeatedly blocked applications for Bitcoin ETFs, the Bermuda Stock Exchange (BSX) launched its exchange on September 18, 2020.
The fund tracks a “portfolio of cryptocurrencies and blockchain-based assets that are tracked by the index”.
Supposedly, up to 3 million Class E shares will be available for trading, although it is unclear which cryptocurrencies are traced by the fund. The shares will cost $ 1,000 each – so this may not be suitable for those who lack the capital to take the risk and invest in the fund.
Hashdex CEO Marcelo Sampario said that Bermuda was chosen thanks to its friendly regulatory environment for cryptocurrencies and that the ETF will “accelerate the entry of institutional investors in this segment. It is a trend that is becoming more and more. ”
Gibraltar Stock Exchange
The other recent addition to the potentially growing list of Bitcoin ET is one from the Gibraltar stock exchange. Denominated “The Bitcoin Fund”, This ETF is aimed at investors established in Europe, according to the BTC Times.
First launched in Canada, where the ETF is currently being traded, the fund will now be a source of investment for European investors concerned about the current unstable global economy and rising inflation, as Covid continues to have an impact on the economy global.
In addition, the fund facilitates the entry of investors who wish to expose some of their portfolios to the growing cryptocurrency market without having to browse using hardware wallets or manipulate private and public keys.
3iQ, the fund issuer for the Gibraltar Stock Exchange, claims that the ETF is one of the first regulated Bitcoin ETFs in the world to reach a fully regulated exchange in Europe. 3iQ CEO Fred Pye said that this opens the door to sovereign wealth funds and pension funds that want to access a fully regulated Bitcoin product that offers some security for investments outside the wild west of the cryptocurrency market.
Pye added that, “Being listed on the Gibraltar Stock Exchange extends the reach of the Bitcoin Fund in the growing European digital asset market and continues the momentum that defined 3iQ’s exciting progress during the first half of 2020.“
Greyscale Investment Fund
Although it is not strictly an ETF, this fund deserves mention. Grayscale has made headlines in recent weeks for its cryptocurrency purchase to add to its reserves and AUM (asset under management, assets under management)
Greyscale currently holds an astonishing $ 10.4 billion AUM in cryptocurrency assets – just over a year ago, in December 2019, the company held only $ 1 billion in AUM to put that in perspective.
Some of these gains are due to increases in the crypto market, but the accumulation made by the company is still impressive, to say the least.
Investing in the fund means that investors can benefit from a security, rather than direct exposure to the cryptocurrency markets.
Of its products offered, Grayscale Bitcoin Trust (GBTC) remains the most popular for now.