Advocates of cryptocurrencies are impatiently waiting for a decision by the SEC (Securities Exchange Commission) regarding the implementation of ETFs by investment funds. Many cryptocurrency advocates firmly believe that this is the required step for critical mass adoption. They believe that the backing of the SEC will serve as an investment vehicle for traditional and institutional investors.
Before going any further, for those who do not know what an ETF is, the following definition is provided by Investopedia :
“An ETF, or exchange-traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors. ”
Those with a couple years experience in the cryptocurrency industry will know that this is not the first time the commission had to make a decision regarding ETFs. There have been two attempts made by the Winklevoss brothers (Founders of Gemini exchange) and both attempts did not yield positive results.
The SEC pointed out manipulation and fraud concerns for their refusal, which are understandable concerns. However, considering that the crypto market is still in infancy and that unless it is backed by a huge authority such as the SEC, very few will trust the cryptocurrency market. As of now, many are wondering what it will take for a bitcoin ETF to be approved.
At this point in time, there are two other bitcoin ETFs that are currently being reviewed by the SEC. There is an ETF proposal from Bitwise Asset Management and a joint proposal from VanEck and SolidX, an investment management firm and software development firm. The decision of the VanEck and SolidX proposal, which was supposed to be September 30, 2018, was finally postponed to February 2019 (180 days).
While waiting for a favourable decision, I would like to invite all cryptocurrency investors to take the time to learn more about their investments. A favourable decision by the SEC would imply huge amounts of money coming into the crypto space. Therefore the next bull run may leave some behind (those who invested in the wrong projects) and you do not want to miss the train!