In April, MarketWatch and Barron’s are convening a group of crypto industry participants to discuss the context of the asset class (part one is April 7; Part two will be held on April 14). One session focused on the “illusionary bitcoin ETF” and featured VanEck’s Jan van Eck and Purpose Investments’ Som Seif.
It is not surprising that both have strong views on the downsides of bitcoin
ETF will bring US investors.
ETFs have proven to be the most effective way for investors to get exposed to various assets, Seif notes – especially those that were previously less accessible, like gold.
Van Eck agrees. He said ETFs bring price competition to the market, just like they do for gold, as well as transparency, tax reporting, and more efficiency in transactions. Both panelists said they think bitcoin’s volatility will decrease as access increases and as the industry passes more standards, such as Public offering of Coinbase.
Noting the explosive growth of recent applications to fund startups, both acknowledge that it is unclear how many different exchange-traded products the market can absorb.
Even if the SEC approves a number of different applications, investors will choose winners and losers, Seif said. The fees, he added, attracted a lot of attention in the ETF space, but “strategy is more important” – and strategy becomes extremely important in the context of funds involved in bringing digital assets in. wrapper “traditional finance”.
Van Eck agrees, calling bitcoin the “revolution” to finance, in part because it involves instant payments and 24-7 transactions. “Performance and mechanics are in baseball but it’s important to get it right,” he said.
having a market cap of $ 10 trillion, he said, bitcoin could be expected to hit about half that amount – which would represent a six-more-time increase in price.
As the asset matures, VanEck begins to see significant volume from other entities in the crypto ecosystem, whether miners or banks, that an ETF represents. companies with such exposure could make sense, van Eck said. He notes that companies that play purely about cryptocurrencies, such as Riot Blockchain Inc.
and Silvergate Capital,
has been higher than bitcoin’s price, even if companies include crypto access among other features, like Paypal
and Square Inc.
has performed poorly.
“This is an emotional asset,” Seim said. Even if supply and demand will play a key role in pricing, what is consistent is that volatility has declined year on year since its inception, he argued, and will continue to be so as bitcoin becomes more legalized. as an institutional property.
Continue reading: ETF Wrap: Cryptocurrency version