global initiative for responsible investment

Bitcoin ETFs signal another step forward for digital currencies

History was made recently with the launch of the first ever Bitcoin exchange traded fund (ETF) authorised to begin trading on US exchanges. As the buzz and excitement around this potential (and now verified) approval grew, the price of Bitcoin and other crypto assets closely followed.

Subsequent to the banning – yet again – of Bitcoin and other crypto mining and trading activity in China by the People’s Bank of Chain (PBoC), this rebound has been particularly bullish.

Bitcoin, almost immediately following the launch of this ETF product, hit all-time-highs and continues to drive institutional interest and investment both in the US and internationally.
A step forward for digital currencies
The authorisation of this first-ever Bitcoin ETF product in the US is significant for several reasons. First, this is the culmination of years of efforts by blockchain and crypto industry advocates pushing to try and achieve more democratic and equitable access to the crypto asset sector.

Secondly, approving an ETF product makes crypto understandable and accessible to a much broader pool of investors, i.e. having crypto available in an ETF “wrapper” means that it will – as demonstrated by the billions of inflows into the product since launch – attract and reflect investor appetite.

Lastly, and perhaps most importantly, is that the approval of this first ETF product indicates a shift in regulatory tone and perhaps an easier path for the other ETF options that have been forward for review at the Securities and Exchange Commission (SEC).

Given the regulatory ambiguity that has surrounded blockchain and crypto assets, this is a tremendous step forward for broader adoption and implementation. That said, there are a few specific points that potential investors should keep in mind prior to allocating assets to this investment product.

Like any new financial product there are positives and negatives, all of which should be consulted prior to investing. Let’s take a look at a few considerations that every potential investor should be aware of going forward. 

global initiative for responsible investment